5 Simple Ways to Invest in Real Estate

Real estate investing has long been one of the most recognized paths to building wealth, but many people assume the only way to invest requires having piles of cash to spare and buying houses outright. The truth is, real estate investing has many avenues to success. 

Each approach comes with its own pros and cons—some offer steady income but demand hands-on work, while others are more passive but may deliver slower growth or higher fees.

Whether it’s participating in the day-to-day activities as a house flipper or landlord, buying into a real estate investment trust (REIT), joining a real estate investment group (REIG), or pooling funds through crowdfunding, almost anyone can tap into the benefits the real estate market offers. 

Here are five simple ways to get started. 

1. Rental Properties

Owning rental properties is a good choice for individuals who have do-it-yourself (DIY) skills, the patience to manage tenants, and the time to do the job properly.

Although financing can be obtained with a relatively low down payment, it does require substantial cash on hand to cover upfront maintenance and to periods when the property is empty or tenants do not pay their rent.

On the plus side, once the property starts bringing in cash, it can be leveraged to acquire more property. Gradually, the investor can acquire a number of income streams from multiple properties, offsetting unexpected costs and losses with new income.

According to U.S. Census Bureau data, the sales prices of new homes (a rough indicator for real estate values) consistently increased from the 1960s to 2007, before dipping during the financial crisis. Since late 2011, sales prices resumed their rocky, but steady ascent, even surpassing pre-crisis levels.

By the mid-2025, the average home sale price in the U.S. rose to over $510,000.

2. Real Estate Investment Groups (REIGs)

Real estate investment groups (REIGs) are ideal for people who have some capital and want to own rental real estate without the hassles of hands-on management.

REIGs are a pool of money from a number of investors, similar to a small mutual fund, that is invested in rental properties. In a typical real estate investment group, a company buys or builds a set of apartment blocks or condos.

A single investor can own one or multiple units of self-contained living space, but the company operating the investment group collectively manages all of the units, handling maintenance, advertising vacancies, and interviewing tenants.

In exchange for conducting these management tasks, the company takes a percentage of the monthly rent.

A standard real estate investment group lease is in the investor’s name, and all of the units pool a portion of the rent to cover vacancies. This means you’ll receive some income even if your unit is empty. As long as the vacancy rate for the pooled units doesn’t spike too high, there should be enough to cover costs.

3. House Flipping

House flipping is for people with significant experience in real estate valuation, marketing, and renovation.

This is the proverbial “wild side” of real estate investing. Just as day trading is different from buy-and-hold investing, real estate flippers are distinct from buy-and-rent landlords.

Real estate flippers often aim to profitably sell the undervalued properties they buy in less than six months.

Many people are familiar with the flippers who buy a home and renovate it to sell for a profit. This is a longer-term investment, and investors may only be able to take on one or two properties at a time.

However, some property flippers don’t invest in improving properties. They pick properties they hope have the intrinsic value needed to turn a profit without any alterations.

Flippers who are unable to swiftly unload a property may find themselves in trouble because they typically don’t keep enough uncommitted cash on hand to pay the mortgage on a property over the long term. This can lead to snowballing losses.

4. Real Estate Investment Trusts (REITs)

A real estate investment trust (REIT) is best for investors who want portfolio exposure to real estate without making a traditional real estate transaction.

A REIT is created when a corporation (or trust) uses investors’ money to purchase and operate income properties. REITs are bought and sold on the major exchanges like any other stock.

A corporation must pay out 90% of its taxable profits in the form of dividends to maintain its REIT status. By doing this, REITs avoid paying corporate income tax, whereas other companies are taxed on profits and then determine whether and how to distribute after-tax profits as dividends.

Like regular dividend-paying stocks, REITs are a solid investment for investors who seek regular income.

REITs can afford investors entry into nonresidential investments such as malls or office buildings, which are generally not feasible for individual investors to purchase directly.

More importantly, some (though not all) REITs are highly liquid because they are exchange-traded trusts. In practice, REITs are a more formalized version of a real estate investment group.

When looking at REITs, investors should distinguish between equity REITs that own buildings and mortgage REITs that provide financing for real estate and may also invest in mortgage-backed securities (MBS).

Both offer exposure to real estate, but the nature of the exposure is different. An equity REIT represents ownership in real estate, while a mortgage REIT focuses on the income from real estate mortgage financing.

5. Online Real Estate Crowdfunding Platforms

Real estate investing platforms are for those who want to join others in investing in a relatively large commercial or residential deal. The investment is made via online real estate platforms, which are also known as real estate crowdfunding.

The best real estate crowdfunding platforms pool the resources of investors looking for opportunities with other investors looking for financial backing for real estate projects. These platforms give investors an opportunity to diversify into real estate without putting up a large stake.

The Bottom Line

Whether real estate investors use their properties to generate rental income or to bide their time until the perfect selling opportunity arises, it’s possible to build out a robust investment program by paying a relatively small part of a property’s total value upfront.

As with any investment, there is profit and risk with real estate investing, and markets can go up as well as down.