What’s the Easiest Way to Invest in Real Estate?

A friend of mine recently asked me about investing in a REIT, which is a Real Estate Investment Trust. There’s been a lot of them poppin’ up over the last 15 to 20 years – especially online. This particular one that she was looking at had $1,000 minimum. My friend asked, “I don’t have the $1,000 now, but if I did is this a good idea?” The online REIT that she’s looking at is so super-hipster right now too (because my friend who asked is also a hipster).

“I’m investing in my online REIT through this typewriter.”

The site talks about crowd-sourcing and how you can become a real estate mogul just like everyone else! It’s real sexy, amazing, gnarly, yadda yadda yadda.

A lot of REITs invest in commercial real estate, like apartments, office buildings, retail buildings, and it makes money from the rental fees that they charge the tenants that use those properties. It delivers those monies to the investors in the form of dividends.

The Good News: Well-managed REITs tend to be good investments and a lot of them have performed really well compared to stocks.

The Bad News: Like stocks, there are no guarantee of dividends or return on investment, so there’s definitely some risk involved. If the REITs make money, you make money! Woohoo! If the REITs lose money, you lose money as well. Boo!

If you want to invest $1,000 in an REIT, it’s not the worst idea on the planet – but is it the best option?

There are a lot of down payment assistance programs out there that help a person with decent credit and $1,000 in their pocket to buy a house. Right now, prices are pretty decent, appreciation rates are pretty decent and interest rates, WHOA! Interest rates are at historic lows. So that makes this whole thing, like a super no-brainer.

Don’t believe me?

“Is it pronounced ‘reet’? Asking for a friend.” -Hipster Friend

Well, here’s how investing in an REIT works: Let’s just say you took that $1,000 down payment for a house, and invested it in that sexy REIT instead. In 5 years, that $1,000 turns into a magical $1,645! Cha-ching!

Now, on the flip side, let’s just say instead of investing in that REIT, you bought yourself a town home with that $1,000. If you hang onto that town home for 5 years (and ditch the REIT), you’re looking at a profit of over $11,000! Double cha-ching!

Why do you earn so much more money on the town home? Because, my friend, you’re earning the appreciation rate on the ENTIRE town home, the $140,000 – $150,000 town home. Plus, it’s called leverage and it’s AWESOME.

In a nutshell, by investing first in your home, you’re leveraging money that you’re already spending anyway in an investment that has proven to provide more long-term wealth to Americans than any other investment out there. So, hey, if you want to take that $1,000 and invest in that sexy REIT, good luck. But if you want to take that $1,000 and REALLY do some investing, well, you know where to find me.

Make it a great day!

Kristin LaVanway
480-282-7464
kristin@hereinphoenix.com

 

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32 N 96th Street, Mesa 85207, None

  • $235,000
  • Bedrooms: 4, Baths: 1
  • Home size: 1,832
  • Lot size: 35,284
  • Year built: 1945
  • MLS #: 5849472
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625 W Mckellips Road, Mesa 85201, Seyenna Vistas

  • $19,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,100
  • Lot size: 5,000
  • Year built: 1990
  • MLS #: 5834341
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625 W Mckellips Street, Mesa 85201, N/A

  • $18,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,100
  • Lot size: 0
  • Year built: 1990
  • MLS #: 5846307
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246 Leisure World --, Mesa 85206, Leisure World Golden Hills Plat 3 Cond PL

  • $174,499
  • Bedrooms: 2, Baths: 2
  • Home size: 1,731
  • Lot size: 2,205
  • Year built: 1974
  • MLS #: 5828600
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1513 W Vine Avenue, Mesa 85202, Bray Acres 3 Lot 1-112 TR A

  • $150,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,107
  • Lot size: 7,248
  • Year built: 1970
  • MLS #: 5847488
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2621 E Commonwealth Circle, Chandler 85225, Colonia Coronita Amd Lot 1-150

  • $200,000
  • Bedrooms: 4, Baths: 2
  • Home size: 1,334
  • Lot size: 10,502
  • Year built: 1979
  • MLS #: 5848734
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6643 & 49 E Alder Avenue, Mesa 85206, Desert Wells

  • $160,000
  • Bedrooms: 2, Baths: 2
  • Home size: 952
  • Lot size: 19,206
  • Year built: 1955
  • MLS #: 5848688
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220 N 22nd Place, Mesa 85213, Del Camino Villas Unit 1-93 96-157

  • $159,900
  • Bedrooms: 2, Baths: 2
  • Home size: 1,155
  • Lot size: 144
  • Year built: 1985
  • MLS #: 5845876
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5450 E Fairfield Street, Mesa 85205, Cove AT Alta Mesa Lot 1-166 TR A-D

  • $220,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,402
  • Lot size: 4,116
  • Year built: 1991
  • MLS #: 5846560
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915 S 95th Way, Mesa 85208, Superstition Country 4

  • $140,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,512
  • Lot size: 6,294
  • Year built: 2003
  • MLS #: 5844578
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461 N Larkspur Street, Gilbert 85234, Village 2 Lot 90-225 & TR A

  • $220,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,322
  • Lot size: 7,445
  • Year built: 1979
  • MLS #: 5847586
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1049 S Exeter Street, Chandler 85286, Hamilton Park

  • $265,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,534
  • Lot size: 4,503
  • Year built: 2006
  • MLS #: 5846031
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656 S 97th Way, Mesa 85208, Golden Crest Terrace Unit 4

  • $49,000
  • Bedrooms: 2, Baths: 2
  • Home size: 1,921
  • Lot size: 8,472
  • Year built: 1980
  • MLS #: 5842863
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31626 N Roy Rogers Trail, Queen Creek 85142, Chandler Heights Ranches Unit I

  • $140,000
  • Bedrooms: 3, Baths: 2
  • Home size: 1,040
  • Lot size: 54,450
  • Year built: 1997
  • MLS #: 5846901
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732 W Calle Del Norte --, Chandler 85225, Chandler Manor

  • $119,800
  • Bedrooms: 4, Baths: 2
  • Home size: 1,200
  • Lot size: 6,935
  • Year built: 1973
  • MLS #: 5804871
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ARMLS Listing Data last updated 11/21/2018 12:37 PM MST.