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Updated by Joanna James on Jul 31, 2019
Headline for 5 Ways to invest in real estate without buying property – Other methods of reaping benefits from the real estate market
Joanna James Joanna James
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5 Ways to invest in real estate without buying property – Other methods of reaping benefits from the real estate market

The housing market has been breaking records over the past few years. Though it's an enticing prospect, not everybody has the means to buy property. So, one has no choice but to look to other options.


Invest in ETFs

This is one other way that the real estate market yields benefit to the investor. You don't need to have an obscene amount of money to invest in ETFs. The cost is low, and it bears the same characteristics as index funds and mutual funds. If you are looking for a diversified option, there's nothing better than ETFs. It's quite easy to find a fund that's suited to you as it has become a popular notion these days. For example, ETFs like Vanguard's VNQ and IVR are two such funds that invest in property like hotels and buildings.


The mutual funds

In the same category as ETFs are real estate mutual funds. There are many investors who swear by them. If this is your first investment, rather than investing in something like new apartment projects in Colombo, you can opt for something low-risk like mutual funds. Even if you don't know much about real estate investments, the track records will help ease the concerns you have as to the possible benefits. Moreover, these schemes are perpetrated by decades of research and by those with investment expertise.



One who wants to invest in REITs has the same justification as those who invest in mutual funds and ETFs – they are practically the same thing. REITs allow you to diversify on your investment without actually having any physical property in possession. Also, someone with plans to invest in projects executed by companies like TRI-ZEN should try out something like REIT first – they expose you to the ups and downs of the market, thus giving you a thorough idea. Furthermore, be sure not to invest in non-traded REITs as they are not entirely sound on liquidity, and you will also have to bear high fees as opposed to publicly-traded REITs.


Invest in real estate companies

You will be surprised to find that there are companies that operate in the same manner as REITs but not quite REITs. The only problem is that they may be harder to find, and the return might not be quite to your liking. However, this is definitely a safer option for the first-time investor. Though harder to find, they offer you a diversified range of options as they are constituted in the forms of hotels, timeshare companies, resorts, and so on. Like in every other case, make sure you do sufficient research before throwing in your money.


Real estate notes

This is another viable option for those who are reluctant in making a direct investment in property. In the case of real estate notes, the investor will be buying debts through a bank at a lower price. Although many investors have positive feedback on this type of investment, it would be a good idea to exercise due diligence before actually investing.

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