When done correctly, real estate investing is a lucrative endeavor. It helps diversify your current investment portfolio and provides you with another stream of income. The key is making the right decisions.

If you are new to real estate investing, choosing the right investment product is crucial. Here you can find some top options for beginners.

Real Estate Investment Trusts (REITs)

REITs let you invest in real estate without having to deal with the physical property. Commonly compared to mutual funds, the REIT is actually a company that owns commercial properties like hotels, apartments, retail spaces, and office buildings. They usually pay higher dividends, which makes them a common option for retired individuals.

Some real estate investors don’t want or need the regular income this product offers, which allows them to reinvest the dividends to help grow the investment they made further.

Rental Properties

They usually offer properties in foreclosure or going through the short sale process at a bargain. If you don’t mind being a landlord, consider investing in one or two as rental properties. To avoid the hassle of being a landlord, hire a third-party property management company to do this for you.

Flip Investment Properties

Do you love HGTV? If so, you know all about flipping properties. You purchase an underpriced home that needs work. Renovate the property and then sell it for a profit. Just remember, they make it look easy on TV, and flipping properties can get costly, so be sure you are prepared to cover the costs.

Is Investing in Real Estate Right for You?

Investing in real estate is an effective way to build your wealth. Just make sure you choose the right product. For beginners, REITs, rental properties, and flipping houses make smart options. Be sure to seek the help of professionals in the industry, too, which will minimize your risk.