Whether you’re a veteran investor looking for something to spice up your portfolio or a newbie who has limited access to capital, creative real estate investing can be a great way to achieve your goals. Below are some of the top non-traditional methods to investigate.
Section 8 Housing
Accepting housing vouchers and providing housing for Section 8 renters is stereotypically seen as something to avoid. People may say it’s risky, or that tenants are unruly and unreliable. In reality, this investing strategy can be a great way to provide housing that does not require a lot of up-front investment and will give affordable housing to those who need it most.
Great renters within the Section 8 program are not hard to find. Typically, these families won’t cause you any more stress than other tenants, and they tend to be long-term renters, so you don’t have to worry about vacancy rates as much as with traditional housing. Also, at least 70% of their rent is taken care of by the federal government, so you are guaranteed that much and only have to trust tenants to fulfill the remaining 30%.
However, you should be sure to double-check your state laws to see how you can apply to the HUD on a tenant’s behalf or advertise your units as Section 8 friendly. Sometimes there are special considerations for tenants who benefit from this program, and you must always follow federal fair housing regulations.
Also, take the time to research quality property management software that can help your tenants pay on time and in full. Innago is one of the best real estate apps for investors and will make it easy for tenants to pay their rent online or with automatic monthly payments, taking some of the stress off them and you.
House Hacking
Wouldn’t it be nice for your tenants to take care of your mortgage payment each month? With house hacking, this becomes a reality at the cost of a little bit of privacy.
House hacking is when you buy a home that has multiple units and live in one of those units while renting out the rest and profiting enough to pay off your mortgage. You will live closely with your tenants, but it may be a small price to pay to be housed for free.
House hacking can be even more lucrative if you add separate kitchens and bathrooms to the sub-units. That way, not only do you add value and appreciation to the property, but you also don’t have to share those spaces with your tenants.
Self-Storage Units
Another one of our creative real estate investing strategies is one that has been on the rise lately. Self-storage investing is all the rage in the real estate community due to its recession-proof nature and comparatively low maintenance needs and start-up costs.
A great part of self-storage investing is that you can reap the benefits of it without committing to buying or building an entire facility. If you have extra storage space in your properties, you can rent that space out to someone who needs an area to store their belongings.
Flipping Properties
Also called a “fix and flip”, flipping houses is when a buyer acquires a low-value or distressed property and renovates it before selling it for a profit.
One of the best things about house flipping is that you never have to worry about screening tenants or dealing with the stress that comes from housing them. You simply sell the property and move on to the next. However, although this method sounds relatively easy, there is a lot to consider for you to make the most out of this strategy. The most successful investors have an existing knowledge of high-value renovations, and which changes will have the most impact on the sale of the property.
A good way to ensure that you’re going to make as much profit as possible is to do extensive research and consult with contractors and other investors in this field who can guide you towards the best bang for your buck.
Conclusion
Creative investing serves as an alternative to traditional real estate investing. If you have limited access to deals or are simply looking for something different, creative methods can help you get a leg up on those who haven’t explored these avenues. Be sure to do your own research before committing to anything and look for the best property management software that will help you achieve your goals without too much unneeded effort.
