Whether you’re investing in real estate for your career, retirement, or portfolio, there are plenty of opportunities for ongoing passive income. Getting started does not always mean buying real estate. There are ways to invest $10,000 in real estate using other avenues while still getting your foot in the door.
Is real estate a good investment?
Investing in real estate is a great way to make money long or short term, and the opportunities are everywhere. A lot of people think you need a lot of money to get started when you can really do a lot by investing $10,000. Real estate investing doesn’t have to be difficult or freeze your bank account. Explore these five ways to invest $10,000 in real estate now and be on your way to successful investing in no time.
6 ways to put $10,000 to good use in real estate
Check out these six investment opportunities and decide how to invest $10,000 in real estate based on your goals and lifestyle.
Real estate crowdfunding
In this type of investing, you don’t have to be an accredited investor or be worth millions – a group of regular investors like you can invest in large-scale properties through a combination of financial and intellectual resources. individual. Adding your $10,000 investment to the picture can lead you into an investment scene that would never have been available otherwise.
Platforms to choose from include:
- Fund raising
- crowd street
- DiversyFund Inc.
- Ground floor
While the obvious benefits of crowdfunding are investing in expansive transactions with minimal cash and potentially increasing your net worth with passive income, the main downsides are the same risks that come with any form of real estate investing. . The market may turn, and the project just isn’t as successful as expected. Get a comprehensive overview of the opportunity you are looking to invest in and weigh your options carefully.
Invest as a partner
Deciding to invest as a partner can be extremely lucrative if you and your partner complement each other’s work ethic and ideas while each bringing something different to the table.
If you can invest $10,000 in real estate, maybe your partner will match your investment and you will share the responsibilities. Or, you invest the money, and they’ll do the renovations.
Either way, make sure it’s someone you can rely on and trust. and be sure to consider the pros and cons before diving in.
- Pool money and ideas for better investments.
- Spread the workload — each partner can focus on what they do best and take on their own responsibilities.
- Get an impressive portfolio with more opportunities.
- You don’t have 100% control, but rather a partnership – sharing the revenue equally (or however you decide).
- Partners can become unreliable, not keeping their end of the bargain or their workload.
- Partners’ finances can change, causing the whole deal to suffer and the partnership to struggle.
Wholesale real estate
On the right market and with the right connections, wholesale real estate can be done with very little money and become an easy way to make money. You would essentially be the middleman, finding properties and finding end buyers while earning disposal fees for yourself.
The steps are as follows:
- Find a property. This is usually a distressed, vacant or neglected property with little hope of selling under normal circumstances.
- Contact the owners. Often these sellers are looking for a quick conclusion and are highly motivated to sell their property. Make an offer for the property, indicating that you are a wholesaler, and consider the condition of the property and the market value.
- Enter into a contract with the sellers. Use a real estate attorney to add a clause in the contract that you can assign the contract to an end buyer by a certain date or you can terminate the transaction.
- Find the end buyer. Award the contract to the end buyer for more than you agreed to pay the sellers.
Example: Sellers are expecting $70,000 for their property under contract. As the wholesaler, you offer the property for $80,000 to the end buyer, who still considers it a bargain, and you walk away with $10,000 to close the deal.
- Close on property. The buyer and seller close and you receive your transfer fee. Wholesale properties can close in just weeks, as many are bought with cash.
Wholesale opportunities may not come around too often or too widely in your area, but they are worth grabbing if they arise. There is very little risk to you and little personal money involved.
Down payment on a rental property
Another way to invest $10,000 in real estate is to use it as a down payment to purchase a rental property. Although not a large down payment, it is still possible to buy with as little as $10,000 down, depending on the type of loan you use and the price of the property.
Buying a rental property is a great way to generate cash flow and diversify your portfolio. A rental property is a more hands-on investment approach, where you manage and maintain the property and deal directly with your tenants.
It may take a while to see real income from a rental property, but as the loan is paid off and the property (hopefully) appreciates, you can have equity in your building. investment and a monthly stream of passive income.
The downside of buying a rental property is the unknown.
- Will this area deteriorate or prosper? Choosing the right neighborhood counts for appreciation and rental vacancy. Months without tenants means money coming out of your pocket to pay that mortgage and those taxes.
- Is the house in good condition? If you have to install a new septic tank a few months later or replace all the appliances, it can be a blow to your budget.
- Have you properly checked your tenants? If they stop paying rent, damage the property, or are a nightmare to manage, tenants can be difficult to evict.
Turn your space into an Airbnb
An increasingly popular real estate investment is investing in an Airbnb property. It is a property that you can rent by the night, by the week, by the month or even for a whole season. Generally, Airbnbs charge more per night than a typical rental, so you could potentially make more money with an Airbnb than with a regular rental.
The secret really is the location. Airbnbs work best when they’re in popular vacation spots near water, activities, nightlife, or popular sights. Locations in major cities or near sporting events, universities, concert halls and fairgrounds may also be ideal.
Spaces suitable for an Airbnb investment:
- A current rental property in a great location
- A second or vacation home that you already own
- A motorhome/RV
- A bedroom in your house / master suite / pool house
Investing in an Airbnb can cost very little if you already own the property. Fix it up for best results and buy bedding, a coffee maker, fun themed decor, dishes and silverware so visitors can have everything they need and enjoy their stay. The newest, cleanest and most well maintained properties are the most sought after and attract the most visitors for the most money.
Before buying a property to rent as Airbnb, make sure you understand your state and city regulations and any restrictions a homeowners association may have in place.
Investing in real estate in an IRA
Another way to invest $10,000 in real estate is to become a private lender through your IRA if you have one. Using funds from a self-directed IRA opens up the possibility of lending money to individuals for real estate investment transactions, without you needing to manage or own a property. Some of the rules associated with an IRA investment include:
- You cannot lend money to family members or spouses for investment purposes
- Interest and loan repayments must be returned to your IRA account
- Assets used to secure the loan may not be collectibles
With an IRA investment strategy, you’re essentially using the money you’ve already saved to invest and make a return. Thanks to the private conditions with the borrower, you control your investment. While there are rules and restrictions, this can be a great way to grow your retirement account passively and tax-free or tax-deferred.
The Basics of Investing in Real Estate with $10,000
Investing in real estate is not just for the rich, the entitled or the lucky with all the connections. You can start building your own relationships and creating your own real estate investment opportunities right now. Choose one of these options, or take them all. They are all available to you if you have $10,000 to invest in real estate.
Frequently Asked Questions
What can I invest in with $10,000
You can invest in many forms of real estate with $10,000. Choose from real estate like a rental property or Airbnb, or use your money to invest in crowdfunding, wholesale, or a partnership where you might not have to deal with real property.
Is $10,000 enough for real estate?
Yes, $10,000 can be used to invest in many different areas of real estate. Wholesale and investing in an Airbnb can be done with even less, while $10,000 is a great starting point with options like crowdfunding.
Can I buy a house with $10,000?
In the cheap, yes. You can use your $10,000 investment as a down payment on a property, depending on your type of loan and the price of the home.