Higher income can be earned on investments when a person has at minimum five-figures of cash to work with. While there are various low-risk investing strategies for adults, the housing industry offers a lot of opportunity especially to beginners. A person who asks how to invest 30K in real estate could find the approach displayed on this page useful.
Like any cash investment, it is important to consider all risks first before signing on the dotted line. Every investor will likely have his or her favorite means of earning income. Getting the most information about a particular investment product is a good first start before making a commitment to buy.
Ways to Invest 30K in Real Estate
Buy High ROI Rental Homes
The ongoing credit crisis in many cities has supercharged the rental market. Because some adults no longer are approved for a property loan, men and women are turning to renting homes in almost every state in the U.S. Homes that are already fixed up and ready to rent are known as investment properties. Homes such as those offered here at JWB that provide a paying tenant upon the sale of the property create long-term positive cash flow.
There are several variations of a turnkey company that provides houses for sale. The most basic type is a company that offers foreclosed homes that were purchased on the open market at a very cheap price. Homes of this type are usually not renovated and often require the investor to complete repairs to make the home rentable.
Companies that offer brand new houses that have never been used in the rental industry are another type of turnkey group. Reading up on the topic of turnkey homes can inform even the most beginner investors about how just 30K can be used to own a furnished rental property that includes a tenant lease.
Buy and Hold Investing
Homes that have lost value compared to values of several years ago are hotbeds for investors. Cities like Jacksonville, Tampa and Orlando in Florida have some of the lowest market prices for homes compared to other cities. A buy and hold approach means that a home is purchased for a reduced price and then held onto for one to five years. Investors who use this approach take the risk that the property will increase in value and can then be sold to earn a profit.
Some people who use this approach call it flipping homes for a profit. While the method is risky, it can be profitable for a person who has as little as $30,000 to invest. One disadvantage to purchasing homes under this method is the cost of needed repairs. Homes that have been sitting vacant for more than a year usually need many types of internal and external repairs. Unlike turnkey homes, a buy and hold house will require repair expenses.
Real Estate Leverage
Successful moguls in the housing industry use a technique called leverage to own properties for a short period of time. Because most lending companies now lend at less than 10% interest, it can be profitable for some investors to purchase a property using a leverage approach. A home can be financed for a low rate and the property can be rented immediately. This provides a steady income stream of the property and a way to pay the recently approved mortgage.
The funds to leverage a property can be taken out of an IRA or 401K account although these funds could be subject to a penalty. A simple investment of 30K could produce several properties using the real estate leverage. The homes can then be sold if property values rise and the original loan can be paid off or transferred.
Coastal Homes in Florida for Sale
JWB is the market leader in the state of FL for managed rental properties. Out-of-state investors who are just learning of the fully managed approach can download the complementary PDF guide located on this page. Everything that a person needs to know about investing in a turnkey home on the Florida coast is provided.