Investing in Real Estate - The Easiest Way There Is!

So, 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, and this particular one that she was looking at had $1,000 minimum. And she's like, "I don't have the $1,000 now but if I did, "you know, is this a good idea?" And the REIT that she's looking at, oh, it's super-hipster you know, they talk about crowd-sourcing and hey, you can become a real estate mogul just like everybody else it's real sexy, okay, it's real sexy.

And like a lot of REITs, it invests in commercial real estate, like apartments and office buildings, retail, and it makes money by the rents that they charge the tenants that use those properties. It delivers those monies to the investors in the form of dividends.

Overall, well-managed REITs tend to be good investments and a lot of 'em have performed really well compared to, you know, stocks, so of course, you know, like everything there's no guarantees, there's some risk. So, if they make money, you make money, and well, if they lose money, so do you. If you wanted to invest $1,000 it's not a bad idea. But is it the best option? Hmmm. These days there's 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.

Like, let's just say you're renting a two-bedroom town home and you're paying $950 a month in rent, which is about what they go for these days, you could buy a similar town home for about the same per month by the time you factor in the mortgage and the insurances and the HOA and everything.

Using that $1,000 as your down payment, and let's be honest, you probably already spent the $1,000 on the security deposit for the town home, but you know, I've talked to a lot of people that just don't buy into that whole buying is better thing. "Hey, if the air conditioning breaks, I don't wanna fix it, "and what if I wanna move?" And, "I don't wanna lose my shirt like all those "other losers back in the crash," and I totally get that, I totally get that. But let's just look at the situation right now, which is not like the crash, okay? Right now, prices are pretty decent, appreciation rates are pretty decent and interest rates, whoa! they're at historic lows.

And I know it might not seem that way, because they've been low like this for a long time, but trust me, they are really low. And so that makes this whole thing, like a super no-brainer. Don't believe me? Let's just say you took that $1,000 and your invest it in that sexy REIT.

In five years that thousand bucks turns into a magical $1,645 ca-ching! But, let's just say instead you took that $1,000 you bought yourself a town home, and let's just say, to be fair that in order to get the money out of the town home you have to sell it, so I'm gonna factor in the cost of selling that bad boy.

If you hang on to that town home for five years, you're looking at a profit of over $11,000. Ca-ching, ca-ching. But, how does that work? Like, why do you earn so much more money on the town home? Well, because, my friends, you're taking $1,000, yes, but you're earning the appreciation rate on the entire town home, the $140,000, $150,000 town home, it's called leverage and it's awesome. By the way, we didn't even factor in the whole rising rents thing because, let's be honest, in five years, you're not going to be paying $950 in rent. Probably gonna be paying more like $1100 in rent. But, whatever, right? So, 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, over the long haul, to provide more wealth to Americans than any other investment out there. I mean, okay, to be frank here, there's a lot of countries where you'll get to own property, America is one of those places where you can buy your own little piece a dirt, and if you take advantage of it, it pays off big.

And guess what? If you start early, it pays off even bigger. So, hey, if you wanna take that $1,000 an invest in that sexy REIT, good luck.

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