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What to Know About Investing in Real Estate in 2025!

“Real Estate as a wealth building tool.”

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Investors look for various opportunities they hope will help them grow their wealth. Some invest in the stock market directly by buying stocks and bonds, while others choose a more passive form of investing like index funds. Certain investors prefer to back enterprising entrepreneurs, and some people determine that real estate is the avenue to pursue.

There are several different ways to invest in real estate, including buying a home. Investing in real estate can be lucrative, although the return on such investments can be affected by high interest rates. When interest rates fall, investors often come out of the woodwork. According to a recent Bankrate survey, 29 percent of Americans said that real estate was their prime pick for investing money they won’t need for at least 10 years. Investors considering real estate have many options to choose from.

Become a landlord

NerdWallet says buying a property with the intention of renting it out is one of the most common ways to invest in real estate. However, this could be one of the more labor-intensive real estate investment options, as it requires property owners to field calls from renters and always be available to tackle issues that inevitably arise. Plus, if renters are not properly vetted, landlords may end up with less-than-ideal tenants. While there are management services that can offset some of the work, farming out tasks comes with expenses that can cut into profits. Still, when a successful renter-landlord dynamic is established, this option can provide significant long-term income.

Flipping properties

Buying a property and “flipping it,” which means renovating and putting it up for sale shortly after, is another real estate investment venture. Flipping requires a lot of work and perhaps even some extraordinary skills. First, it involves finding up-and-coming neighborhoods and then renovating within a reasonable budget so that you can sell the home at a premium. Remodeling costs can run high, and the time involved in flipping may be longer than investors anticipated.

Buying your own home

Building equity in a home creates a nest egg that homeowners can tap into at a later time, particularly when they choose to sell. Bankrate says banks treat owner-occupied properties more favorably, giving borrowers lower mortgage rates and requiring lower down payments.

Purchase REITs

REITs are real estate investment trusts that enable investors to invest in real estate without actually touching physical real estate properties, advises NerdWallet. REITs are like the mutual funds of the real estate realm, and include companies that own commercial real estate. REITs can pay out high dividends, making them popular retirement investments. Dividends can be reinvested to grow your money further.

Investing in real estate can be a worthwhile option for people who want a tried-and-true vehicle for seeing their money grow.

Please keep in mind this information should not be considered as financial advice. Investment decisions should be based on individual research and consultation with a qualified financial professional. The value of investments can fluctuate, and past performance is not indicative of future results. Always consider your risk tolerance and financial goals before making investment decisions.