In the midst of the booming real estate market, have you been wanting to get into the game but don’t know where to begin?
Real estate investment advisor Joseph Leon said it’s definitely a good time to invest in Bakersfield real estate. But if you’re not looking to become and landlord, or don’t have the cash to throw down on a rental property right now, here are some relatively stable, alternative ways to invest in real estate.
REITs, or real estate investment trusts, are like stocks. An REIT is a company that owns, operates or finances income-producing real estate. They must pay out 90 percent of their taxable income to shareholders.
Leon said when you buy these, you basically give your money to someone else to manage and dictate what it does based on the market. He also said there isn’t much of a return on the investment since it’s relatively low risk.
Equate it to a bank, he said. “A bank is a guaranteed situation,” Leon said. “It’s a fixed deal so there’s less to worry about.”
With REITs, he said since they follow the real estate market, there’s a small risk of it going one way or the other, but it doesn’t have to be a huge investment and you have a more diversified portfolio.
Crowdfunding sites like Fundrise and CrowdStreet have made it possible to invest in real estate from afar as well. Options like diversified investment, curated opportunities that might be right or proven resilient assets not only give investors a chance to get in the real estate game without throwing down a load of cash, but also advice on where to invest.
Leon said things to look at in any market include the job availability, supply and demand and location.
“Become knowledgable in the area you want to invest in,” Leon said. “If you want to be good at what you’re doing, be knowledgable about it.”
CrowdStreet named the Inland Empire, adjacent to Kern County, one of the best areas to invest in 2022, along with San Diego and San Francisco.
But, since the risk with these is low, the return will not be as high as buying an income property.
However, for those looking for a little risk, see tips on choosing the right property and market.