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10 Simple Ways To Start Investing in Real Estate

Real estate can be an important part of a diverse retirement portfolio.

By Jenny Cohen

Edited by Eric McWhinnie

Updated Jan. 2, 2025

As you approach retirement, you may be considering investing in real estate to diversify your portfolio and lower your financial stress. But one of the big issues you may face is how exactly to invest in real estate.

You have several options to gain real estate exposure, so don't fret. Check out these 10 choices and see if one of them could work for you.

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Own your home

You may be looking for different options to start investing in real estate without considering one that is very close to you: your own home.

You invest in real estate each month when you pay your mortgage to your lender as you get closer to owning it outright without any debt, and in turn, that helps grow your wealth.

One thing you may want to consider is getting free from your debt before you retire by paying off your mortgage. It will give you the ability to own your home outright as a free and clear addition to your portfolio.

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Flip a property

If you have the money to take on a project, you may want to consider buying a property, fixing it up, and then selling it for a profit.

Flipping a property takes planning, and you’ll need to know how to hire contractors to work on the property you buy or do the work yourself.

And remember, the objective is to sell the property for a profit so consider the expenses you’ll have to sink into a property to flip and find a buyer.

Buy a REIT

A REIT, or real estate investment trust, is an easy way to add real estate to your portfolio.

The investment trust allows you to invest in a collection of real estate properties without having to directly buy the properties.

It’s similar to a mutual fund, making it simple to add to your portfolio and diversify your real estate investments without the responsibility of actually caring for the properties.

Get a free stock valued between $5 to $200

Secret: You don't need thousands of dollars to buy thousand-dollar stocks or create a diverse portfolio.

Robinhood offers a method of investing called “fractional shares.” On its own, one share of a single stock could cost a lot of money, making it difficult to diversify. Robinhood allows you to buy pieces of stock instead, so you have the option to build a diverse portfolio quickly.

Let’s say you want to invest $250, as an example.

With that amount, you could build a relatively diverse portfolio with an investment of $50 in a big tech stock, $50 in a retail stock, $50 in an energy stock, $50 in a manufacturing stock, and $50 in a bank.¹ This content is for informational purposes only, you should not construe any such information as legal, tax, investment, financial, or other advice. To get stock reward, new customers need to sign up, get approved, and link their bank account. Stock rewards shares cannot be sold until 3 trading days after the reward is granted and the cash value of the stock rewards may not be withdrawn for 30 days after the reward is claimed. Stock rewards not claimed within 60 days may expire. See full terms and conditions at <a href="https://robinhood.com/us/en/support/articles/open-account-pick-your-stock/">rbnhd.co/freestock</a>. Fractional shares are illiquid outside of Robinhood and are not transferable. Not all securities available through Robinhood are eligible for fractional share orders. For a complete explanation of conditions, restrictions and limitations associated with fractional shares, see the Fractional Shares section of our Customer Agreement. Robinhood Gold is offered through Robinhood Financial LLC and is a membership offering premium services available for a fee.

Even better news? Add a Robinhood Gold membership, and you’ll get access to 4.25% (as of 11/15/24) APY² Annual Percentage Yield. Rate valid as of April 12, 2024. To earn interest, a cash balance is needed. If you have a margin balance, there is no cash balance to earn interest. Interest rates for cash sweep and margin investing can change at any time. Fees may reduce interest earnings. on your uninvested cash³ Interest is earned on uninvested cash swept from your brokerage account to partner banks. Partner banks pay interest on your swept cash, minus any fees paid to Robinhood. As of Nov 15, 2023, the Annual Percentage Yield (APY) that you will receive is 1.5%, or 5% for Gold customers. The APY might change at any time at the partner banks' or Robinhood's discretion. Additionally, any fees Robinhood receives may vary and are subject to change. Neither Robinhood Financial LLC nor any of its affiliates are banks. All investments involve risk and loss of principal is possible. Robinhood Financial LLC (member SIPC), is a registered broker dealer. and the ability to buy and sell stocks 24 hours a day, 5 days a week.

Open and fund a Robinhood account and earn up to $200 in stock

Invest in a rental property

It may be a better option to become a landlord if you would prefer to own a piece of property that you care for.

You can invest in a home, or you can buy a multi-unit residential building. You could also choose to buy a commercial property and rent it out to different businesses that need the space.

It’s a good idea to check in with a real estate agent or real estate lawyer who is well-versed in rental properties to help you get started and give you an idea of what it takes to own a property.

Use a real estate investing platform

Real estate investing platforms can help you connect with real estate investors that pool money together from many sources to invest it and then send any profits back to the group of investors.

Some websites like Fundrise or RealtyMogul allow you to participate as a small investor. But you’ll want to do your own research on investing platforms and their possible returns before you decide to invest.

Buy a vacation property

You may live near a place that attracts tourists on a seasonal basis, or you may want a second home to visit and live as a snowbird in retirement.

A second home can be used as a vacation property for yourself but also a vacation property for others if you rent it out to cover some of the costs.

It also may not have to make a profit as long as you can cover the total costs out of your own pocket and then sell it later for extra money.

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Work with a group of investors

You’re not alone in wanting to invest in real estate, so consider getting others together to form an investment group.

By investing with a group of investors instead of doing it on your own, you have more buying power to invest in a bigger multi-unit residential property or a larger commercial property.

You can also make decisions together or hire a professional to manage your properties while your group of investors makes money.

Rent your current property

You can make your current properties work for you by renting them out with a variety of options depending on what you can do with your property.

Consider different ideas, such as renting out a barn for events or a large garage for vehicles and motor homes.

You could even rent out your own home if you don’t live there full time and make some extra cash while you’re away.

Start an Airbnb

Airbnbs are a great option if you have a room or space that you want to rent out on a short-term basis.

You can list a room or perhaps a guest house on your property for short-term rental use. You can also buy a property in a touristy area that could be enticing for vacationers who want a short-term rental property.

Take into account issues like amenities nearby and the location of your Airbnb. A space near a hospital or airport, for example, could be a short-term rental for people who work for short periods in the area.

Earn up to a $300 bonus and grow your money with up to 4.00% APY

This powerful combination checking + savings account from SoFi® allows you to earn up to a $300 bonus with direct deposit and grow your money with up to 4.00% APY.⁴ New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus of either $50 (with at least $1,000 total Direct Deposits received during the Direct Deposit Bonus Period) OR $300 (with at least $5,000 total Direct Deposits received during the Direct Deposit Bonus Period). Cash bonus will be based on the total amount of Direct Deposit. Direct Deposit Promotion begins on 12/7/2023 and will be available through 1/31/2026. Full terms at <a href="http://sofi.com/banking">sofi.com/banking</a>. SoFi Checking and Savings is offered through SoFi Bank, N.A., Member FDIC. SoFi members with Direct Deposit can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the 4.00% APY for savings (including Vaults). Members without Direct Deposit will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of Dec. 3, 2024. There is no minimum balance requirement. Additional information can be found at <a href="http://www.sofi.com/legal/banking-rate-sheet">http://www.sofi.com/legal/banking-rate-sheet</a>

This is one of the top accounts we’ve seen, and offers like this can be rare. You work hard, and now it’s time to make your money work for you — with SoFi, you can grow your money with hardly any effort!

SoFi has no account or overdraft fees⁵ Overdraft Coverage is limited to $50 on debit card purchases only and is an account benefit available to customers with direct deposits of $1,000 or more during the current 30-day Evaluation Period as determined by SoFi Bank, N.A.  The 30-Day Evaluation Period refers to the "Start Date" and "End Date" set forth on the APY Details page of your account, which comprises a period of 30 calendar days (the "30-Day Evaluation Period"). You can access the APY Details page at any time by logging into your SoFi account on the SoFi mobile app or SoFi website and selecting either (i) Banking > Savings > Current APY or (ii) Banking > Checking > Current APY.  Members with a prior history of non-repayment of negative balances are ineligible for Overdraft Coverage. and additional FDIC insurance up to $2 million on deposits is available through a seamless network of participating banks.⁶ We do not charge any account, service or maintenance fees for SoFi Checking and Savings. We do charge a transaction fee to process each outgoing wire transfer. SoFi does not charge a fee for incoming wire transfers, however the sending bank may charge a fee. Our fee policy is subject to change at any time. See the SoFi Checking & Savings Fee Sheet for details at <a href="http://sofi.com/legal/banking-fees/">sofi.com/legal/banking-fees/</a> ⁷ SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $2M through participation in the program. See full terms at <a href="http://sofi.com/banking/fdic/terms">SoFi.com/banking/fdic/terms</a> See list of participating banks at <a href="http://sofi.com/banking/fdic/receivingbanks">SoFi.com/banking/fdic/receivingbanks</a> Plus, you can receive your paycheck up to 2 days early.⁸ Early access to direct deposit funds is based on the timing in which we receive notice of impending payment from the Federal Reserve, which is typically up to two days before the scheduled payment date, but may vary.

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SoFi is a Member, FDIC. ⁷ SoFi Bank is a member FDIC and does not provide more than $250,000 of FDIC insurance per legal category of account ownership, as described in the FDIC’s regulations. Any additional FDIC insurance is provided by the SoFi Insured Deposit Program. Deposits may be insured up to $2M through participation in the program. See full terms at <a href="http://sofi.com/banking/fdic/terms">SoFi.com/banking/fdic/terms</a> See list of participating banks at <a href="http://sofi.com/banking/fdic/receivingbanks">SoFi.com/banking/fdic/receivingbanks</a>

Open your SoFi account and set up direct deposit

Start a side hustle

Have you considered taking on a side hustle to earn extra money before you retire? Or maybe you want to open your side hustle now and get it up and running so you can earn money from it when you’re retired?

Think about investing in the physical business property you may need to operate your new endeavor by purchasing the space you need to operate your business.

Commercial property could be a great investment that you can sell later to make a profit when you’re ready to cash in and move on.

Bottom line

It’s important to have a diverse portfolio for your retirement, and real estate could be a vital part of your investment plans.

Review your portfolio to see if real estate is right for you, and consider talking to a financial advisor who can help you find the best investments.

The right investments could allow you to retire early or lessen the worry you might struggle financially when you retire.

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