Real estate investing might sound like something only wealthy people do, but it's actually something many people can get into. At its core, real estate investing means buying property to make money from it. That could mean renting it out, selling it for a profit later, or using it for a business.
There are many ways to invest in real estate, and each one comes with its own risks and rewards. Some people buy houses to rent out, while others invest in apartment buildings, office spaces, or even land. Real estate investing can be a smart way to build long-term wealth, especially if you take the time to learn how it works.
In this blog, we’ll break down what REI, real estate investing, really means, explore different types of investments, and help you understand how to get started, whether you're a brand-new real estate investor or just looking to learn more.
What Does Real Estate Investing Include?
Real estate investing includes more than just buying and selling houses. It’s a broad term that covers many different ways to earn money from property. Whether you're looking to earn steady income or grow your wealth over time, there’s likely a real estate strategy that fits your goals.
Here are some of the main types of real estate investments:
1. Rental Properties
Rental properties are one of the most popular ways people get started with real estate investing. The idea is simple: you buy a home, apartment, or small multi-family building and rent it out to tenants. The rent they pay can give you a steady monthly income, which is called “cash flow.”
Over time, the property may also go up in value, which helps you build equity. Some investors manage the property themselves, while others hire a property management company. Learn more about the truth of self-managing rentals in our guide. Rental properties can be a great long-term investment, especially in growing areas where housing demand is strong.
2. Fix-and-Flip Homes
Fix-and-flip investing involves buying homes that are old, damaged, or outdated and then fixing them up to sell at a higher price. This type of investing takes more work and money upfront, but it can bring in fast profits if done right. Most of the real estate shows you see on TV are this type of investing since house flipping draws quite a bit of interest.
Investors need to understand the local market, know how to budget for repairs, and work with contractors who can renovate quickly and efficiently. While this strategy can be risky, especially if repair costs go over budget or the market changes, it’s a great option for those who enjoy hands-on projects and want quicker returns.
3. Commercial Real Estate
Commercial real estate includes properties like office buildings, retail stores, hotels, and warehouses. Instead of renting to families or individuals, you lease these spaces to businesses. Commercial leases often last several years, providing more stability and higher income potential compared to residential rentals.
However, commercial properties usually cost more to buy and maintain. Investors need to do careful research, understand business needs in the area, and sometimes work with brokers to find tenants. While it takes more experience and planning, commercial real estate can be a strong investment for those looking to grow their portfolio.
4. Real Estate Investment Trusts (REITs)
REITs let people invest in real estate without having to buy or manage property themselves. A REIT is a company that owns and operates income-producing real estate, like apartment buildings, shopping centers, or hotels.
Investors can buy shares of a REIT just like they would buy stock. This makes it a good choice for beginners or anyone who wants a hands-off approach. REITs also offer the benefit of regular dividend payments, which can be a nice source of passive income. They are easy to access through most brokerage accounts and offer a way to diversify your investment portfolio.
5. Land Investments
Buying raw land is another type of real estate investment that can offer long-term growth. Investors may buy land in areas expected to grow in the future, hoping that the value will rise over time.
Some people choose to develop the land by building homes, rental units, or even commercial buildings. Others may lease the land for farming, storage, or other uses. Land can be less expensive than developed property, but it also comes with its own risks, like zoning laws or a lack of utilities. Still, with the right location and planning, land can be a valuable investment.
6. Wholesaling Real Estate
Wholesale real estate is a strategy where investors find properties being sold normally off-market, get them under contract, and then assign that contract to another buyer, usually another investor, for a fee.
Wholesalers don’t actually buy the property themselves. Instead, they act as a middleman between the seller and the buyer. This can be a great way to get started in real estate with little to no money down. It does take strong networking, good negotiation skills, and a solid understanding of property values. For beginners looking to learn the market and build cash quickly, wholesaling is a smart entry point.
Real estate investing is not one-size-fits-all. What you choose depends on how much money you want to invest, how hands-on you want to be, and what your long-term goals are.
How to Start Your Real Estate Investing Journey
Real estate investing can seem overwhelming at first, but it becomes much easier when you understand your options. Whether you’re thinking about buying your first rental property, flipping a home, or starting small with a REIT, there’s a path that fits your budget and comfort level.
The key is to start with research. Learn about your local market, talk to other investors, and figure out how much money and time you're willing to invest. It’s also smart to set clear goals—do you want monthly passive income, long-term value growth, or a quick return?
You don’t have to do everything at once. Many successful investors start small and build their portfolios over time. The more you learn, the better decisions you'll make. And remember, every expert was once a beginner.
If you're ready to take the first step, check out our beginner’s guide to investing or reach out to a local real estate professional for personalized advice. Your journey to building wealth through real estate can start today.
