With one million dollars, it’s easy to get into the real estate world. In theory, that’s realistic. Getting a little bit more realistic and practical, you could run out on ideas to invest $1 million dollars in the real estate industry. In this blog post, I’ll unveil the best 6 ways to invest in real estate if you’ve got $1 million dollars. Now you don’t have to put all your eggs in one basket and expect them to hatch.
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With these workable ways to invest in the real estate industry, you can diversify your investment portfolio with as much as $500k, keeping the remaining half of a million dollars for other forms of investment or futuristic potential investment opportunities. While it’s easy to invest in real estate, especially if you have the money, things will get easier as you build your portfolio of realtors and acquire more worthy assets. That said, here are 7 realistic ways to invest $1 million dollars in real estate.
How to Invest $1 Million Dollars in Real Estate: 7 Best Ways.
REITs (real estate investment trusts) is a kind of investment where you buy into real estate projects along with other investors (big and small). Ordinarily, you wouldn’t be able to acquire these projects because of their cost, and as an investor with a REIT, you’re entitled to dividends. A REIT is a company that operates a number of real estate projects that generate income.
They allow investors with small funds the opportunity to buy into the shares of the real estate projects in their portfolio. REITs are big, in the concept of having to deal with a chain of management and all of that. And some of them are publicly traded in the stock market. Some of the best REITs you can invest into include:
- Sabra Health Care REIT Inc.
- Simon Property Group
- Iron Mountain
- W. P. Carey Inc.
- Crown Castle
- Physicians Realty Trust
- Realty Income
- EPR Properties
- Stag Industrial
- Bluerock Residential
- Digital Realty Trust
So basically, as an investor with any of these REITs, you’re entitled to profits which come in steadily. You basically own a share in the REIT’s portfolio of real estate properties and as these properties generate income, you get a cut off the revenue. That’s basically how REITs work. They pool funds from different investors to secure, renovate or acquire projects (which become collectively owned).
With $1 million dollars invested in a handful of REITs, you’re definitely going to recoup your investment steadily. Some REITs are better than others on this list simply because they’re more popular and have a larger portfolio of real estate properties they manage. Plus, you want to make your own research about each REIT before throwing your money into them.
2. Flip houses.
One of the best ways to invest $1 million dollars in real estate is to flip houses. The concept of flipping houses isn’t a new one. And a lot of people are doing this as realtors to make a living. When you flip a house, you buy it and renovate it for sale. So basically, when you hear about house flipping, it’s all about acquiring properties and renovating them to resell them at a higher price.
Take for example you acquire a house for about $54,000 dollars. If you’re able to sell the house at $78,000 dollars after renovation and you spend a total of $12,000 dollars renovating the apartment or building, you’re left with a net profit of $12,000 dollars (having spent a total of $66,000 dollars acquiring and renovating the property).
With one million dollars, you’re able to acquire more expensive properties and flip them for profit. This would mean spending about $600,000 acquiring a property, $100,000 on renovation, and reselling the property at $1 million dollars or more.
Just like REITs, RELPs operate in a similar spirit, but they’re smaller. Generally stands for real estate limited partnerships, RELPs offer you the opportunity to invest jointly with other investors. They pool the funds of different investors to acquire and renovate a real estate property for resale.
If you’re looking to invest $1 million dollars, then partaking in a joint investment with the aid of RELPs is a great idea. The pay is slow because it takes time to renovate and then sell a property, which is when you get to reap the rewards in full.
4. Acquire properties for lease.
When I say acquire properties for lease, I mean buy properties that people can rent. This could be a bedroom apartment, hotels, or even an event center. Whichever one you choose to buy, you’ll definitely be making a wise decision. The challenge is it won’t be easy to find good hotels or event venues willing to sell for under $1 million. This way, building your own from scratch would be a better idea (more this later). Acquiring properties for lease is one of the best ways to definitely invest $1 million dollars in the real world.
Much more than just bedroom apartments, event centers and hotels, there are other properties people rent or hire. And they’re not necessarily landed or apartment properties. Some of these properties are tech devices like vehicles, and instruments or equipment for whatever purpose.
5. Build a real estate software.
When it comes to investing, the options at your disposal can be really creative ones if you look well. Now, with $1 million dollars, you’ll be able to build a software that makes a lot of real estate activity really easy. For example, you can build a peer to peer software that matches the properties of real estate sellers to the spec of buyers. This way, it’ll be easy to connect sellers to potential buyers.
You can develop a real estate software that simply lists the properties available for sale or lease in a city or a region or in different countries, cities of the world. It’ll cost a lot of money, but realistically, $1 million will start, finish, and initiate rogue marketing strategies to amplify the patronage and visibility of the software. Another really good idea is to develop a software that evaluates the worth of real estate properties, giving investors an edge when it comes to making decisions as to what properties to acquire.
6. Buy properties for future sale.
If you want to invest $1 million dollars in real estate, you can acquire properties and keep them. Real estate properties are prone to appreciating in value rather than depreciating. This is because of their durability and the need for people to relocate from time to time.
Plus, the ever increasing number of people roaming this world will need new settlements and apartments. It’s inevitable. So, if you acquire properties now and keep them as part of your investment portfolio, you’re definitely going to put them out for sale at a much higher price. The price could double or quadruple. If you’ve got a million dollars right now and you want to invest in the real estate industry by acquiring properties, you’re better off acquiring several less costly properties in different cities than investing in one really expensive property.
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7. Build commercial structures.
With $1 million dollars, you can build real estate properties, commercial structures like event centers, a lodge, bedroom apartments, a 20-room hotel, a grocery store, supermarket, warehouse, or a boutique. Whichever investment you choose to capitalize on, the profit will be long lasting and evergreen.
There are more real estate properties you can build from scratch on your own, you just need to think about them, and also to think about what kind of establishment you would like to manage. One million dollars is more than enough money to start up a laundromat, a restaurant, and even an auto workshop or an auto showroom for a car dealership (of your own).
You can focus on one of these ideas or invest a smidgen of $1 million into a few of them to see which sprouts revenue the most. One of the best things about building a commercial structure is that it’s going to generate lasting income for you. Take for example a grocery store, there’s no expiry date and you only run out of business when you choose to. Unless you fail to manage your finances and you don’t get a lot of patronage, the grocery store generates revenue for life.
How to Invest $1 Million Dollars in Real Estate: 7 Best Ways – Final Words.
You’ve got $1 million dollars and you’re wondering how to invest it in the real estate world? Then you’re open to a list of options, some of which include buying properties for future sale, building real estate agencies, commercial structures, and softwares, acquiring properties for lease, flipping houses and other projects for profit, investing in REITs (real estate investment trusts) and RELPs (real estate limited partnerships).
A more beneficial idea is to develop and promote a real estate peer-to-peer software that connects buyers to sellers of real properties. This software can have many features, including a feature to calculate the worth of a property before listing it in the market for sale.
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