Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below.
Chase C. Hunter became a real estate investor after a Google search and a $3,800 initial investment. At the time, while living in Houston, she searched for places she could buy cheap property and found ample opportunities in Detroit, with homes selling for as little as $1,000.
“I closed on my first two properties the same day in June of 2021,” she told Realtor.com in an article published in August 2024 (1). “The day I closed was my very first time in Detroit.”
Top Picks
Both properties came with significant issues. She paid $2,000 for one and $1,800 for the other, renovated them, found renters, and began her career as a landlord. She has since repeated this process for eight homes.
Hunter’s journey was a successful one, thanks to a lot of effort and a little luck, but it wasn’t easy.
Rental properties can require a lot of hands-on labor
While Hunter paid very little for the two homes she purchased, that was far from the end of the story.
She had to invest $85,000 in renovations for the house she bought for $2,000 to ready it for renters. On the second house, purchased for $1,800, she spent $130,000 to convert it into her office due to unexpected water-line problems.
But you don’t need to get your hands dirty to profit from real estate.
With Arrived’s Private Credit Fund, you can invest in short-term loans that are used to fund real estate projects, such as renovations, property rehabs or even new home construction projects.
All of the loans are secured by residential housing as collateral — meaning you don’t have to worry about the safety of your investment.
Historically, Arrived Private Credit Fund has paid 8.1% annualized dividends to investors, distributed on a monthly basis. Dividend returns on stocks don’t even come close — the long-term average dividend yield of S&P 500 companies is 1.83%.
While her business has been a success so far thanks to her hard work, Detroit’s real estate boom helped fuel this success. The median real estate price plummeted to $58,900 in 2009 and the city filed for bankruptcy in 2013.
Now, with prices soaring to $250,000, according to Realtor.com, investors like Hunter find it much easier to profit in this rapidly appreciating market.
Barely a decade after Detroit declared bankruptcy, The Wall Street Journal called it “America’s most unlikely real-estate boomtown.”
But if you don’t have $130,000 to renovate a fixer-upper, there are other ways to invest in real estate. If you prefer passive income to dealing with tenants or large down payments, you could look into crowdfunding platforms.
In addition to their Private Credit Fund, Arrived also allows you to invest in shares of rental homes and vacation rentals for as little as $100, without taking on the responsibilities of property management.
Getting started is simple: browse a curated selection of homes (each vetted for their appreciation and income potential), and choose the number of shares you want to buy.
And once you’ve established a vacation rental investment, you might want to expand into multifamily and industrial properties.
Accredited investors can now tap into this opportunity through platforms such as Lightstone DIRECT, which gives accredited investors access to single-asset multifamily and industrial deals.
Lightstone DIRECT’s direct-to-investor model ensures a high degree of alignment between individual investors and a vertically-integrated, institutional owner-operator — a sophisticated and streamlined option for individual investors looking to diversify into private-market real estate.
With Lightstone DIRECT, accredited individuals can access the same multifamily and industrial assets Lightstone pursues with its own capital, with minimum investments starting at $100,000.
Real estate ETFs and REITs
For those who want to invest in real estate without turning it into a full-time job, there are plenty of convenient alternatives.
Investing in real estate investment trusts (REITs) and exchange-traded funds (ETFs) can offer a more accessible and diversified way to participate in the real estate market without the direct ownership and management responsibilities of individual properties.
REITs are publicly traded companies that own properties and distribute profits as dividends. ETFs, on the other hand, pool money to invest in REITs or real estate-related businesses. Both options provide a way to benefit from real estate without the responsibilities of individual property ownership.
Want to tap into the expertise of former hedge fund analysts for top real estate stock and ETF picks? Try Moby.
The team of former hedge fund analysts and experts at Moby spend hundreds of hours each week sifting through financial news and data to provide top-tier stock and crypto reports to keep you up-to-date on what’s moving the markets.
If you’re serious about investing in real estate for passive income, Moby’s superior research can help you reduce the guesswork when selecting REITs or ETFs.
In four years, across almost 400 stock picks, Moby’s recommendations have beaten the S&P 500 by almost 12% on average. With their easy-to-understand formats, you can become a wiser investor in just five minutes, backed by a 30-day money-back guarantee.
No matter what type of investment you’re looking at, a financial advisor can help you crunch the numbers and build a plan that works.
But hiring an advisor can be a lifelong commitment, which might make or break your retirement. That’s why finding reliable advisors is crucial.
That’s where Advisor.com can come in. The platform connects you with an expert near you for free.
Advisor.com does the heavy lifting for you, vetting advisors based on track record, client ratios and regulatory background. Plus, their network comprises fiduciaries, who are legally required to act in your best interests.
Just enter a few details about your finances and goals, and Advisor.com’s AI-powered matching tool will connect you with a qualified expert best suited for your needs based on your unique financial goals and preferences.
Finding the right advisor isn’t always easy — there’s no one-size-fits-all solution. That’s why Advisor.com lets you set up a free initial consultation with no obligation to hire to see if they’re the right fit for you.
You May Also Like
Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
Article sources
We are committed to transparency and accountability, correcting errors openly and adhering to the best practices of the journalism industry. For more details, see our editorial ethics and guidelines.
Realtor.com (1)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.