Here’s The Very Best Way To Invest – And 4 Ways To Do It Affordably

Turn the channel to HGTV or pick up a real estate investing book in the bookstore and you’re going to see many different ways to invest – wholesaling, flipping, renting, you name it. Each one has its merits and its drawbacks, and I actually invest in several different ways because I like having options and I like having multiple exit strategies. But if you were to ask me which one is the best way for a beginner to invest, I’d probably say being a rental investor.

The reason is simple: cash flow.

If you’re any other kind of investor, you’re probably depending slightly on a big hit of income from the sale of the property (if you’re a developer or rehabber) or the contract (if you’re a wholesaler). But a rental property has a different benefit – that constant stream of income.

And that stream of income is VERY powerful because it gives you freedom. You can invest while still working at your job (if you want to do that) and the cash flow adds to your income. Or if you invest in enough rental properties to replace your employment income, you can quit your job and enjoy the income from your investments.

But the question that aspiring investors ask me a lot is: “how do I invest in rental properties affordably?” They look around their neighborhood or the see what their own property is worth and they wonder how they can afford to spend that money on one or more rental properties. So here are 4 ways to do that affordably.

Tip 1. Stop looking in your own neighborhood

This is a huge mistake that many investors make: they assume that they’ll just rent out a property near to them. But often, the neighborhood in which you OWN your house is rarely the best neighborhood to RENT another property. (It might be, but that’s not always the case). You may need to look elsewhere… elsewhere in your city, or even in another city or state! (Using a property management company will help you take care of the property if it’s not nearby).

Tip 2. Partner with other investors

Here’s a great way to start investing if you’ve never invested before – partner with someone else. Yes, you might not enjoy as much return on investment (ROI) as you would if you owned the property outright but you’d at least have someone else to help you share the responsibilities. Just make sure that the partnership agreement is clearly and fairly spelled out for both of you!

Tip 3. Buy from a turnkey wholesaler

When buying your rental property, you should buy it from a turnkey wholesaler. A lot of investors just starting out will buy a run-down property, they’ll fix it up, and then they’ll rent it out. But there can be a lot of cost and time in between the purchase and when you receive that rental check. But a turnkey wholesaler does a lot of that work for you – they buy and renovate a property then they put a tenant in and THEN they sell it to investors. So you can buy a property that is cash flowing right from day 1 without the hassle of fixing it first.

Tip 4. Use your 401(K)

Did you know that you can invest in real estate using your 401(k) or IRA? If your retirement account is currently in stocks and you’re getting a little worried (as everyone is right now) about what’s in store for the economy, then rental properties might be an alternative to consider to diversify into a cash flowing investment that is backed by a real asset. You’ll need a self-directed IRA to hold real estate – reach out to me or my team and I can give you more info about this.

Investing in rental properties leads to cash flow… and cash flow leads to freedom and to OPTIONS for you. And the great news is: rental properties are SO accessible to invest in and far more affordable than many people realize.