With property prices at an all-time high, many budding investors are turning away from real estate because it’s simply too expensive to get started. However, there are still relatively affordable ways to get on the ladder – whether you’re looking to own a home, rent somewhere out or buy to sell.
This post delves into some of the most affordable strategies for investing in real estate in 2024.
Invest in overseas property
Property prices vary around the world and there are many up-and-coming places where you can still buy houses very cheaply for less than $50k. This includes the likes of Brazil, Mexico, Ecuador and even certain areas of Italy.
Buying abroad has its challenges including understanding local real estate laws and moving there/finding a local to manage the property. There are also some places around the world that do not welcome foreign investors. However, in many areas that have a fair amount of tourism, there are likely to be many opportunities for foreign investors. Some areas may even have incentive schemes to reduce costs such as lower mortgage down payments or $1 run-down homes that you can pay to renovate.
Flip a fixer-upper
On the topic of renovating, there is always the option of buying a fixer-upper. These are properties in poor condition that can be bought very cheaply at auctions or through specialist realtors. The condition is that you must have enough money to then fix them up.
Property flipping can be a great way to make a profit very quickly from real estate, however it is often very hands-on. It involves quickly boosting the value of a property by repairing it and redecorating it and then selling it at a profitable price. The key is to spend as little money remodeling the property while adding as much value as you can. Being able to perform some of the remodeling work yourself is one of the most effective ways to save money on remodeling (i.e. ‘sweat equity’). However, there are many other tricks to increase the value of a property while putting little money in.
Join a real estate syndicate
A real estate syndicate involves using a pool of investors to pay for a property. Everyone only has to pay for a share of the property, making it possible for everyday real estate investors to invest in larger properties and projects. In fact, many new apartment blocks and new housing estates are being funded using this form of investment.
While many real estate syndicates set minimum investments of $50k, there are others out there that welcome investments of as little as $1000. You will earn a slice of the returns relative to the share that you put in. You will also likely have to pay a small fee towards maintenance, so bear this in mind. This guide explains more as to how syndication works.
Buy alternative properties
There are so many types of real estate beyond houses and apartments. Some of these alternative properties can be cheaper to get involved, but do require some research in order to understand all the relevant fees.
A few examples of alternative properties to consider include static caravans, vacation lodges, houseboats and car parks. These types of real estate can often be bought for less than $50k and can be rented out to make your money back (in the case of a car park, space can be charged for using a parking meter). You just need to be aware of what you will be spending in the long run – in some locations, mooring fees or ground fees may eat away at any profits you can make. You also need to consider maintenance costs, which can be high for some alternative properties like houseboats.
Sign up to house raffles
House raffles are essentially lotteries in which you pay for a ticket and then have a chance of winning a property. The owner keeps selling tickets until they’ve made up the value of the property and then they draw a random winner. Such raffles have become an increasingly popular way of selling larger homes. Of course, the chance of winning is very slim. But for the small cost of a ticket, you could win a sizable property.
Some house raffles clearly state that properties won in these raffles cannot be used for investment purposes. However, many raffles do not have these conditions in place. Some of these properties being sold in raffles may require some costly maintenance, so it’s worth still having some money set aside before taking part in such a raffle.
