When investing in real estate, you should make sure that you are putting your money in a good place that will give you high returns. This is especially true when you are endowing a substantial amount of cash. Even if you are not spending millions, it is still important to be smart with how you invest your money.
In this article, we will show you how to invest $100,000 in real estate in 2022 and onwards.
Contents
Important Factors to Consider When Investing in Real Estate
Like any other type of investment, real estate requires you to take some important factors into account to make the best decision there is.
Location
When you invest in real estate property, it is important to find one in a desirable location. This means that the area should have a healthy economy, be growing, and have the potential for future development. You also want to make sure that the property is in a good neighborhood with low crime rates.
Zoning
Typically, the property you are buying is located in an area where commercial or residential zoning applies. This will give you more freedom of what you can do with the property and help avoid any legal issues in the future.
Financing
Before you buy property for investment, you should have enough money saved up to cover at least 20% of the purchase price. This will make it easier to get a loan from the bank and will also help you avoid paying any extra fees.
Risk Tolerance
A high risk tolerance means that you are comfortable with the idea of losing some or all of your investment. Real estate investments can be risky, so make sure you know what you’re getting into before making any decisions.
Cash Flow and Cap Rate
When buying an investment property, you want to make sure that it has a good cash flow and cap rate.
The cash flow is the amount of money that the property brings in each month after all expenses have been paid. Meanwhile, the cap rate is the percentage of return on your investment (ROI) that the property provides.
You should look for properties with a high percentage of both these metrics to expect the best returns.
Condition of the Property
Of course, you should make sure that the property is in good condition and has been well-maintained. This will help avoid any costly repairs down the road.
Good Ways to Invest $100,000 in Real Estate
Now that we have gone over some of the most important factors to consider when investing in real estate, let’s take a look at how you can invest $100,000 in this type of investment in 2022 onwards. There are many different ways of how you can go about it, but the following are four of the most popular methods.
1. Commercial Properties
One of the best ways to generate a high ROI when investing in real estate is by putting your money into a commercial property. This could be anything from an office building to a retail space. By doing this, you will not only get the benefit of the rental income that the property generates, but you can also take advantage of any appreciation that may occur over time.
2. Rentals
Another great way to invest $100,000 in real estate in 2022 is by purchasing a rental property. This could be a single-family home, condo, or apartment, all of which generate income from the rent payments.
3. Multi-Unit Properties
A multi-unit property could be anything from a duplex to an apartment building. By buying this type of asset, you will not only get the benefit of having multiple rental units, but you will also receive economies of scale on things like repairs and maintenance.
4. NNN Properties
These properties have long-term leases with high-credit tenants. With them, you will be able to have a stable income stream coming in each month and also see capital appreciation over time as the area grows
Types of Investment Properties That You Can Buy with $100,000
Now that you know the different ways on how to invest 100K in real estate, here are the types of properties that are available to you with this amount of money.
- Office Buildings
- Retail Spaces
- Business Chains
- Industrial Properties
- Apartments
- Single-Family Homes
- Duplexes/Triplexes
- Short-Term Vacation Rentals
Aside from these, there are many other types of properties that you can invest in with $100,000. Just do your research and find the one that is best suited for your investment goals.
Strategizing Your Investment
The best real estate investing strategy for this situation is to spread your money out among multiple properties. This will help reduce your risk and give you a better return on your investment. You can either invest in multiple properties simultaneously or purchase them one by one over time.
Where to Find Potential Investment Properties
Some of the best places to find potential investment properties are real estate listing websites. These sites have a wide variety of properties available for sale or lease.
Another great place to find properties is a local real estate auction. Here you can purchase foreclosed properties, real estate owned properties (REOs), and tax lien certificates at discount prices.
Of course, you can work with a broker or agent to help you find the best properties for your investment. Not only that, but they can also make the whole buying process a lot easier and even negotiate a better deal on your behalf.
Using Third-Party Sources
If you don’t want to purchase a property yourself, there is also another way on how to get into investment properties—using a third-party source.
For example, you can invest in a real estate investment trust (REIT), which is a company that owns and operates a portfolio of commercial or residential properties. By investing in this company, you will get the benefit of owning property without having to go through all the hassle of buying it yourself.
You can also invest in a crowd-funded real estate project. This is where a group of people pools their money together to buy properties. This is a great way to get started with investing in real estate because you don’t need as much money to get involved.
There are many third-party sources out there that offer this type of service. Just make sure that you do your research before investing your money with them.
Conclusion
As you can see, there are many different ways that you can invest $100,000 in real estate in 2022 and onwards. By doing your research and choosing the right property, you can see great returns on your investment over time.
Just make sure to stay patient and don’t try to do too much at once. Slow and steady wins the race when it comes to this trade.
For more useful tips and information, feel free to check out the rest of our articles or contact us directly. We are always happy to help!
