Is 2024 the year you want to jump into real estate investing? While it can be quite daunting for beginners, there are several ways to get started in the industry without spending a fortune. Today, we’ll review five low-risk real estate investments to consider in 2024. Read along as we discuss crowdfunding, the BRRRR method, REITs, house hacking, and real estate syndication. Check out the video below to find the best method for you and get started today!
Best Low-Risk Real Estate Investments in 2024
Ready to dive into real estate in 2024? Discover 5 low-risk investment options for beginners without breaking the bank! Watch now and find your perfect entry into the market!
What Is a Low-Risk Real Estate Investment?
Not all real estate investments are created equal. Some may carry more risk than others. For instance, buying a rental property may be considered a high-risk investment method. After all, you have to obtain a mortgage or private loan, provide a significant down payment, find tenants, maintain the property, and essentially run an entire business. However, while it can provide higher returns than other strategies, that’s not the only way to invest in real estate.
Low-risk real estate investments are methods that don’t involve putting your entire savings down or putting your life on hold to manage a property. While low-risk strategies may be more attainable, they still prioritize stability, income generation, and diversification to give you the most value in return for your money. Read along as we go over five low-risk real estate investments to explore in 2024.
5 Low-Risk Real Estate Investments in 2024
If you want to invest in real estate this year, you may want to start with a low-risk option. Whether you’re a beginner or an experienced investor, here are several ways to dip your toes in real estate without risking too much time or money.
Real Estate Crowdfunding- The BRRRR Method
- Real Estate Investment Trusts (REITs)
- House Hacking
- Real Estate Syndication
Real Estate CrowdfundingReal Estate Crowdfunding
One of the simplest ways to invest in real estate is through crowdfunding. Real estate crowdfunding involves pooling funds from several investors, typically through online platforms, to invest in real estate projects or investments. This method allows individuals to invest in real estate with lower capital requirements compared to traditional real estate investing, where large amounts of money are used to purchase properties outright.
Why It’s Low-Risk
Real estate crowdfunding reduces individual risk by distributing the investment across several contributors. Instead of an individual putting all their money toward a real estate investment, crowdfunding mitigates the financial impact on one single person, making it a safe option for those unwilling to put all their money toward an investment property.
Who Should Invest?
Crowdfunding is worth exploring if you want to invest in real estate without risking a large sum of money. It’s great for new or small-scale investors who prefer a community-oriented approach to investing.
The BRRRR Method
BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. The BRRRR investment method involves buying real estate at a discounted rate, rehabbing it to increase its value, renting it out to tenants to earn income, refinancing to recover renovation costs, and then repeating the process with new properties.
Why It’s Low-Risk
The BRRRR method is low-risk because investors can focus on adding value to the property they buy through renovations, which allows them to rent it out at a decent rate. From there, they can refinance to recover a lot of the capital they’ve spent.
Who Should Invest?
This investment method is best for those wanting a hands-on real estate investing approach. You’ll need to understand property renovations, repairs, and project management well. Additionally, you must be patient, as the BRRRR process can take time to complete fully.
Real Estate Investment Trusts (REITs)
Real Estate Investment Trusts (REITs)Real Estate Investment Trusts (REITs) are another low-risk way to get into real estate without buying a physical property. Essentially, they pool several investors’ capital to acquire income-generaing properties, which usually provide steady returns. They’re often traded on major stock exchanges and provide a liquid form of investment, making it an easy-in and easy-out investment method.
Why It’s Low-Risk
REITs are considered low-risk because they involve diversified portfolios of income-producing properties, offering consistent returns. Additionally, as publicly traded entities, REITs provide more liquidity than conventional real estate investments.
Who Should Invest?
REITs are best for beginners who want exposure to real estate investing without the commitment or responsibility of direct ownership.
House Hacking
House hacking is an investment method that works best for those who already own a home. Essentially, it involves renting out a portion of your current primary residence or buying a property to rent out while also living in a portion of the home. Another popular method of house hacking involves buying a multi-family property, living in one unit, and renting out the rest.
Why It’s Low-Risk
This method is generally low-risk, especially if you already own a home and can rent out a portion of it. It generally works best for properties in high-demand areas, as it allows for higher rent payments and fewer vacancies.
Who Should Invest?
House hacking is not for everyone. It’s best for homeowners who feel comfortable managing rental properties and handling tenants. Additionally, it can be a good way for individuals
Real Estate Syndication
Like several of these low-risk real estate investment strategies, real estate syndication involves working with other investors to acquire real estate. However, this method involves buying a physical property. Essentially, it allows investors to come together to buy a property that they wouldn’t be able to purchase alone. Then, each partner works together to manage the property, whether it’s used for commercial purposes or a traditional rental property.
Why It’s Low-Risk
Real estate syndication is considered low-risk because it spreads the financial burden across several investors instead of just one person.
Who Should Invest?
Syndication is best for those who have the capital to invest but don’t want the full responsibility of managing a rental property. Additionally, it’s great for investors looking to diversify their portfolios without the complexities of sole ownership.
Manage Your Investment With Ease This Year
There are several low-risk real estate investment strategies to explore in 2024. Whether you’re just starting or want to expand your real estate portfolio, finding low-risk ways to invest can help you earn passive income without breaking the bank or overworking yourself first.
That said, depending on your investment strategy, you’ll need to continuously monitor your real estate investment. For instance, if you decide to rent out a property, you’ll need to either manage it yourself or find someone to help you keep up with the day-to-day tasks.
If you don’t have the time or don’t want to be a full-time landlord, Bay Property Management Group can help. Our team of property management professionals can help ensure your rental property is well-maintained and taken care of 24/7. Contact us today to learn more about our services throughout Baltimore, Philadelphia, Northern Virginia, and Washington, DC.
