The Ultimate List & Guide to Rental Real Estate Investing

Development

Ground up real estate development is a form of high-risk and high-reward real estate investing that involves taking raw land and building a completely new structure on it. While it may sound simple, it is one of the most challenging, yet rewarding, forms of real estate investing.

Buy and Hold

One of the most tried-and-true forms of real estate investing is simply called “buy-and-hold.” Buy and hold refers to a long-term real estate investment strategy where an investor purchases a property, rents it out, and continues to hold it for an extended period of time.

BRRRR

BRRRR (Buy, Rehab, Rent, Refinance, Repeat) is an acronym for a popular real estate investing strategy which involves purchasing a distressed property, adding value by rehabbing, placing new tenants, cash-out refinancing, and repeating the whole process over again with more properties.

House Hacking

House hacking has been around for decades, however it only recently received its trendy name. House hacking is simply the act of renting out part of your home to generate income. There are many creative ways to house hack such as renting individual rooms, parking spaces, and even ADUs.

Fix and Flips

Contrary to popularized television, fix and flips are actually a very intense process that requires great coordination to pull off a profitable flip. The fix-and-flip process involves purchasing a distressed property at a discount, renovating it, then selling it at market value for a profit.

Wholesaling

Real estate wholesaling involves finding and getting a property under contract to buy for a discounted price, then reselling that contract to an investor. Unlike traditional buy-and-hold investing, wholesalers never actually technically buy the property. Instead, they resell the “contract to buy” to an investor for a profit.

Notes

Real estate note investing is a strategy where investors act as the bank to lend money. The lent money is secured by a mortgage or deed of trust to a piece of real estate. Investors earn a return on their investment through interest payments and principal repayment.

Turnkey

As the name implies, turnkey investment properties are rental properties that require zero or minimal work to start generating cash flow from tenants. Some companies take it a step further and may already have tenants in place while providing property management services.

Triple Net (NNN)

Triple net (NNN) investing is a type of real estate investment, where the property’s lease agreements stipulate that the tenants are responsible for paying all property-related expenses such as property taxes, property insurance, and maintenance costs on top of their base rent payments.

Syndication

Real estate syndication is the process of using investor pooled capital to purchase and reposition real estate, and they usually follow a repeatable process: Origination, Operation, and Liquidation. This means the Sponsor, finds and manages the deal, while the Investor provides the capital and enjoys financial returns based on their investment.

Stock investing allows investors to gain direct ownership into promising companies. With real estate being intertwined throughout all aspects of the economy, the convergence of stocks and real estate allows for immense potential to leverage the ease of stock investing with real estate’s robustness. Since real estate is an extremely broad category, investors have countless options for companies to invest in. From the shopping mall owner and operator Simon Group (NYSE:SPG), to real estate software data and marketing companies such as Costar (NASDAQ: CSGP), there are plenty of options available for all types of investors.  

Crowdfunding

Real estate crowdfunding has revolutionized traditional real estate investments by giving individuals an opportunity to invest in larger properties they would have normally been unable to afford on their own. With crowdfunded properties, investors pool their money together and invest in shares of different properties, allowing them to diversify their portfolio without the need for a large capital investment.

Tax Liens

Investing in real estate tax liens can be an alternative strategy for real estate investors looking to generate passive income and potentially acquire properties at a discounted price. Tax liens are legal claims placed by local public government bodies, on properties that are delinquent on their property taxes. Investors can purchase these liens at auctions, to potentially earn attractive returns and, in some cases, even obtain ownership of the property.

Fractional

Fractional ownership real estate investing offers property investors the opportunity to purchase small shares of ownership in a larger piece of investment real estate. This model permits investors to contribute small amounts of capital and spread out their investment risk across multiple sectors and areas. In fractional ownership, investors have the ability to invest and realize the shared benefits of financial returns on larger properties that would have previously been too costly on their own.

Metaverse

The concept of “Virtual Real Estate” is gaining notoriety especially with Metaverse real estate sales recently bringing in over $500 Million. Metaverse real estate can be described as unique parcels of virtual land, within a virtual world. The promise of these virtual parcels is that they are programmable and can be used for socializing, hosting virtual events, and digital real estate investors can even develop, flip or lease them.