If you’re looking for how to invest 200k in real estate, and you actually have this amount on hand, you’ll no doubt be looking to continue to build on such wealth.
Having a substantial amount to invest, you won’t need to be looking for quick solutions or get rich quick schemes here!
Thus, you can look to invest in those options offering a long-term solution instead.
Here we consider the many options open to you when it comes to investing in the fascinating industry of real estate.
How to Invest 200k in Real Estate
Getting Started on Your Investment Path
Before you begin looking at ways of investing your 200k, we recommend taking a few steps beforehand. These include:
Getting your finances in order: Though 200K is a great deal of money, it’s always essential that the rest of your finances are in order before you proceed to invest.
As the most experienced investors will know, real estate can be an expensive venture. Therefore, the 200K should remain totally separate from your everyday living expenses.
Understand the time and commitment involved in real estate: Alongside a lot of cash, successfully investing in real estate requires a good deal of your time plus a lot of patience! With the big returns more often found in those bigger investments, you’ll need to understand that the result will not be instant in this industry.
5 Top Ways of Investing 200k in Real Estate Ventures
1. Buy a Vacation Rental
As well as amassing additional long-term income from it, by owning a vacation rental, you’ll also be able to use the property when it’s unoccupied.
The majority of rental vacations bring in more income per day as opposed to comparable long-term rental properties. Plus, vacation rentals are an easier solution if you have the finance already in place to purchase them outright.
It’s worth bearing in mind though potential marketing and managing costs, as both are more involved here. Also, bear in mind that popular types of block and brick pavers can contribute to your home’s design and increase its market value. However, if you have enough leftover from your purchase, you could use what’s left for such costs until your venture is further established.
Consider those locations whereby the price is within your reach but ultimately are a preferred location for those looking to get away from it all. Equally, ensure that such locations allow you to rent out properties in this way.
2. Purchase a Property to Rent Out
Perhaps one of the most obvious and more common ways to invest in real estate is with a rental property.
Investment property can mean residential or commercial property bought with the intention of renting out to tenants.
This can be a rather exciting way of entering real estate and allows you to rent to families or those businesses and corporations. You can also begin small here or opt for a larger property, having more scope in this market.
A great way to get involved in real estate, this avenue can also ensure better wealth while generating further income along the way.
Therefore if you can create a rent figure that is fixed and covers any expenses such as taxes and maintenance, for example, you can expect to profit regularly from this avenue.
Though once again, costs and time will need to be factored in here. Therefore, you may want to consider the costs of potentially hiring a property manager. This is especially worthwhile if you build a portfolio of such rental properties.
3. Fix Up and Flip a Property
If you have the time and want to get further involved with your property venture, fix and flip could be a good choice with your 200k. Some investors who love this approach actually use hard money lenders to fund their deals instead of using their own money, but this is only recommended for people who know what they are doing.
This involves buying a property for the sole purpose of making some repairs to it and selling it on swiftly for a profit.
Fix and flip demands you have more involvement with the entire process from start to finish, so will require extra time and dedication on your part.
Though this route can be time-consuming and, indeed at times costly, it also has a greater potential to produce those bigger gains. Thus, when you do flip your fixed property, you could be looking at fantastic returns on your initial investment.
This is increased by doing your homework and having a good plan before you jump into that first flip.
Thus, many people find once they’ve fixed and flipped their first property successfully, they develop a taste for acquiring more properties to work on!
4. Consider House-Hacking
House-hacking most commonly requires you to buy a multi-unit building and then rent out several of the units. However, one of these units will be where you move into and live in it rent-free, so to speak.
This means it is a hybrid investment type whereby it’s a primary residence of your home while doubling up as a rental property also.
Best of all, alongside generating positive cash flow, this method allows you to build equity.
Once you’ve satisfied the required period of living in this property type, usually a year to two years, you can then repeat the process with another house-hack if you wish.
For this reason, many people investing in real estate find this a brilliant and low-cost way of getting that portfolio started.
5. Invest in a REIT
If you’re keen to invest but as yet don’t have the required time and commitment, a REIT could be a better solution.
A REIT, that is a Real Estate Investment Trust, allows you to get involved in real estate without having to purchase a property to do so.
REIT works by pooling your investment money. This is then used to fund the purchase, development, and management of those real estate properties.
REIT will tend to focus on one area of real estate. This means apartment complexes, malls, hotels, or hospitals for example. Therefore, it’s the most interesting of decisions for many with money to invest here.
Then, 90% of the annual earnings are returned to you as an investor in the form of dividends. This is usually in the form of rental income.
Final Thoughts on Investing 200k in Real Estate
If you have the confidence and are looking for an investment solution for your 200k that will immerse you in the world of real estate, you could potentially consider more than one of these five ways!
Undoubtedly, for most people, the better way of getting involved with real estate is to invest in a combination of options. Ultimately, this will allow you access to the best aspects of each one. Most importantly, it could encourage the most handsome income stream in the process!