How to Become a Real Estate Investor 2024: Unlocking Property Potential

Investing in real estate could be just what you are looking for to help make your money work harder for you!

At first, I was skeptical. I mean, investment properties and REITs, don’t those that take a lot of money to invest in?

But the more I learned about it, the more I realized that real estate investing isn’t just for rich people. I got into Fundrise, started investing for $10, and slowly built up a strong portfolio.

Let me tell you about investment platforms like Fundrise and other real estate investments so you can kickstart your profitable journey!

Key Takeaways 

Education is important. Learn about different investment options, such as REITs, and create an investment strategy based on your financial goals and risk tolerance.
Pick your investment platform based on your real estate investment strategies.
Here’s a short rundown on some platforms: Fundrise for new investors with less money to invest, Roofstock for single-family rentals, and Yieldstreet for alternative investments.
Start small, think big. Begin with smaller investments like a real estate investment trust (REIT), but diversify smartly by understanding the market and managing risks effectively.

How To Become A Real Estate Investor

Whether you’re interested in single-family homes or commercial buildings, there’s something for everyone.  

With the right knowledge, you’ll learn how to balance risks and rewards, spot great opportunities, and make smart moves with your own money. 

1. Learn About Real Estate Investing

Before you start investing in real estate, it’s important to learn the basics, from understanding real estate terminology to different types of investment properties to learning about financing.   

One of the best ways to understand what real estate investing is all about is to hit the books! Aka, I mean the internet, like reading this blog!

You’ll want to explore the real estate investment options available, such as REITs, buying and renting properties, and others that you may want to consider.

Join real estate investment groups that provide a supportive environment where you can ask questions, share experiences, and learn from others who are already active in the market.

But really, sometimes, the best way to learn is by doing. Start small by investing in a single property or joining real estate investment trusts (REITs). 

I say starting small with investing platforms is the way to go; you could earn money now and turn that into a buying and flipping business, buying a vacation rental property, or investing in other pricey properties.

2. Develop Investment Strategies

Why develop an investment strategy? Simple—it helps you figure out what you want, how much risk you’re comfortable with, and where you’re headed with your investments. 

Start by figuring out your why. Decide what you want to achieve, whether it’s generating passive income, building long-term wealth, or funding a specific financial goal like retirement or education.

Next, you want to decide your risk tolerance. You can understand your risk tolerance by examining how much volatility and uncertainty you’re comfortable with regarding your investments.  

If you need help with what to do, you should ask financial advisors, your real estate agent, or other investment experts for advice.

For example, you may need to start with online investments and work your way up to an investment property if you only have so much money to invest. 

3. Pick A Platform That Fits Your Plans

There are different platforms or places where you can invest, and each one has its own rules and advantages.

Take the time to review the real estate investment platforms, checking out their features, investment options, fees, and track records.

I like to use Fundrise, Roofstock, and Yieldstreet for different reasons, and I’ll discuss each of them in depth below (and why Fundrise is my favorite).

Each investment platform has different fees and features based on your investment criteria. Look at things like the minimum investment requirements, property types offered, and risk profiles.

Remember to pay attention to the fee structures associated with each platform. Are there management fees, performance fees, and any other charges?

Let me get into those so you cna see where you can start investing today!

3 Top Real Estate Investing Platforms

Fundrise

Fundrise is my favorite platform to invest in real estate investment trusts (REITs), which are the best option for beginners without needing a lot of money. 

Instead of buying a whole building by yourself, you can invest as little as $10 and become a part-owner of commercial real estate like apartment complexes, offices, or even shopping centers.  

You can also invest in single-family rental properties and earn some rental income without buying and managing the property yourself.

Fundrise takes care of all the hard stuff for you. They choose which properties to buy, handle all property management, and collect rent from the people who live/work there. 

And guess what? You get a share of the profits! It’s like getting paid to be a real estate investor without having to deal with the headaches of being a landlord.

Even though Fundrise has some fees, like an asset management fee of 0.85% and an advisory fee of 0.15%, it’s fairly inexpensive compared to other platforms.

See why I and other investors like using it in my honest Fundrise Review!

Roofstock

When you invest using Roofstock, you can buy houses that already have tenants living in them, so you don’t have to worry about finding people to rent to or fixing up the place before getting tenants.

You’ll need more funds to invest in rental properties, but Roofstock helps make sure that you get a property that’s already paying out.

You can browse through dozens of single-family rental properties online, check out pictures and property details, and even see how much rent they’re already bringing in. 

Once you find a house you like, you can buy it right from the comfort of your own home – no need to travel or deal with a real estate agent!

And here’s the best part: Roofstock guarantees that the tenants in the house will keep paying rent after you buy it, so you start to generate rental income right away. 

And they also offer the services of a property manager if you don’t want to handle the property yourself. 

Does that sound like a decent way to become a landlord? Read my in-depth Roofstock Review to learn more about it!

Yieldstreet

Yieldstreet is a big investment platform for investors with more cash on hand. You can put your money into big projects, like building apartments or hotels.

Or maybe you’re into art – you can invest in pieces from famous artists and earn a share of the profits when they sell.

Many investors are attracted to its focus on alternative assets that don’t move in sync with the stock market because they can spread out their investments and reduce risk.

Yieldstreet caters to both accredited and nonaccredited investors, with a higher minimum investment threshold of $10,000.

Now, I know that’s a bit more than the average new investor, but you could work your way up and diversify your portfolio as funds come in.

To learn more about how Yieldstreet works, here’s my full Yieldstreet Review, which explains why people think the site is worth the price tag.

FAQs

Is it hard to be a real estate investor?

Being a real estate investor can have its challenges, but it’s not necessarily hard if you’re prepared and willing to put in the effort.

Like any investment, it requires research, planning, and some level of risk-taking.

One challenge is finding the right properties to invest in. This involves understanding the local market, evaluating property values, and identifying opportunities for growth. 

If you work with one of the platforms I shared, like Fundrise, they do extensive research and include detailed information about properties so you know exactly what you’re getting into when you invest.

They take a lot of guesswork out of real estate investing and make it easier for new investors to put their money into something worthwhile.

Are there ways to invest in real estate without buying physical property?

Yes! You can invest in real estate without buying physical property by using options like REITs, crowdfunding platforms, and real estate mutual funds. 

These alternative investment methods can provide exposure to the real estate market without the need to purchase property directly.

You essentially become a part-owner or “digital” owner of the property, while the platform you invested with handles managing the property and tenants and collects and distributes rent and other profits.

How do real investors make money?

Real estate investors have multiple ways to make money, each with its own set of benefits and challenges. Some of these avenues include:

Rental Income: One of the most traditional ways investors make money in real estate is through rental income. Investors purchase properties and then rent them out to tenants.  
Property Flipping: Some investors specialize in buying properties, renovating them, and selling them for a quick profit (appreciation).  
Real Estate Investment Trusts (REITs): Investors can also make money by investing in REITs. REITs distribute a portion of their rental income to shareholders in dividends.
Real Estate Notes: Investing in real estate notes involves purchasing debt secured by real estate properties, such as mortgages or promissory notes.  

What’s the minimum amount needed to become a real estate investor?

The minimum amount needed to become a real estate investor can vary depending on the investment strategy and the type of properties you’re interested in.

Real Estate Investment Trusts (REITs): Many publicly traded REITs allow investors to buy shares for as little as the price of a single share.  
Real Estate Crowdfunding: Some real estate crowdfunding platforms allow investors to participate in real estate projects with relatively low minimum investment amounts, as little as $10.
Real Estate Notes: Some platforms may offer opportunities to invest in real estate notes with minimums ranging from just a few thousand dollars to tens of thousands of dollars.
Real Estate Partnerships: Depending on the partnership structure and investment opportunity, minimum investment requirements can run in the tens of thousands of dollars.

How much money do real estate investors make?

The amount of money real estate investors make varies depending on investment strategy, property type, market conditions, and individual circumstances.

ZipRecruiter says that real estate investors in the U.S. can earn quite a range of salaries. Some earn as low as $36,000 a year, while others earn as much as $119,000. 

How long do I need to hold onto real estate investments?

The length of time you hold onto real estate investments can vary depending on your investment goals, market conditions, and personal preferences.

Your real estate investment strategy plays a role in deciding how long you hold onto real estate investments.

Suppose you’re a long-term investor; in that case, you may hold onto investments for many years to benefit from rental property income or property appreciation.  

On average, investors may hold onto real estate properties for 10+ years to get the most out of the property and go through volatile times or get a certain profit margin back on the property.

Final Thoughts

Real estate investing has its challenges, but with some planning, research, and a proactive attitude, you can navigate them and become a successful real estate investor. 

One thing I’ve learned about how to start investing in real estate is to keep in mind the essentials for success: cash flow, smart property management, and seizing real estate opportunities.  

As you set off on your real estate investment journey, take the time to find real estate investment opportunities that match your cash flow goals and risk tolerance. 

Whether you’re eyeing rentals, fixer-uppers, or other opportunities, there are plenty of suitable property platforms for your investment portfolio.

Ready to get out there and get into real estate investing? Join Fundrise and put your money to work, making those dividends!