There are many reasons why traditional real estate strategies may not work for a potential investor. Sometimes the upfront investment in a property is too high, or that person has limited access to deals for one reason or another. Luckily, there are other ways to invest in real estate. Below are four of the most popular, nontraditional methods of creative real estate.
1: House Hacking
House hacking is a method of creative real estate that is becoming more and more popular. If you have a property that has multiple units, you can use house hacking to have your tenants pay off your mortgage payment and allow you to live in the property for free.
This strategy works best for those who have a more flexible lifestyle, seeing as you’ll be living in very close proximity with your tenants. If you value having your space to yourself, house hacking may not be the method for you. But, if you don’t mind possibly sharing a kitchen with your roommates/tenants, the profit you get from your renters’ rent payments should take care of your mortgage payments and any expenses or utilities you pay on the property as well.
2: Section 8 Housing
If you’re looking for property that is cheaper to purchase and has the potential for strong cash flow, look into investing in Section 8 housing. This type of nontraditional real estate gets a bad rap—many landlords think Section 8 tenants are hard to evict and unreliable. However, Section 8 investment can be very lucrative if done correctly.
As a Section 8 landlord, it’s imperative that you conduct rigorous tenant screening practices and make it very easy for tenants to comply with your lease agreement. Make sure you conduct thorough criminal and credit checks and take the time to research the best real estate apps for investors to allow tenants to easily and automatically pay rent online.
3: Self-Storage Units
One of the most up-and-coming real estate investing strategies is self-storage unit investing. This type of real estate is low maintenance with comparatively lower start-up costs than traditional real estate. Also, if the economy tanks, the self-storage industry usually remains profitable. Periods of change and transition usually prompt interest in storage space.
If you’re a landlord who doesn’t love the responsibilities that come with tenant maintenance, self-storage investment may be the method for you. Tenants usually move their belongings in and leave them there for long periods of time, rarely needing your assistance past signing the lease.
4: House Flipping
Another strategy for creative investing is house flipping. If you’re skilled in construction, interior design, or have a knack for knowing what will add value to a home, house flipping will be right up your alley. Buyers acquire a property that is in disarray or considered low-value, and they strategically ‘flip’, or renovate, the home using knowledge of what kinds of fixes and additions allow for the best returns.
If you can get good at flipping houses, there is potential to do this full-time. However, starting up large projects like adding bedrooms or remodeling kitchens could cause you to spend more than the value it would add, so be careful not to bite off more than you can chew.
Conclusion
Real estate investing is what you make of it. If you’re someone who likes to explore different methods of investment and learn all there is to learn about the field, look into the methods above and see if any of them fit your lifestyle or business needs. Starting any of these as a main or side business could give you an advantage over your peers who are only investing in traditional real estate methods.
