Doubling your money isn't as hard as it may seem, especially in today's market. Real estate can be a great avenue for doubling your money because there are a wide range of investment options to participate in based on the capital and time you have available.
If you're looking to jump-start your investment portfolio in 2022, here are five ways to double your money investing in real estate.
1. Invest in real estate investment trusts (REITs)
REITs are one of the easiest ways to invest in real estate because they are easily traded through a brokerage account, just like a traditional stock. They can be sold quickly to regain liquidity, offer nice dividend returns, and provide access to high-quality real estate assets without having to actively own or manage any properties yourself.
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There are over 200 different publicly traded REITs to invest in across a wide range of commercial and residential real estate asset classes. Since companies can trade under $10 up to hundreds of dollars per share, investors can purchase as much or as little as desired based on their investment budget.
Keep in mind that in order to double your money, it's important you seek out the right REITs in growing industries. Here's a look at three REITs that would have doubled your money in 2021.
2. Wholesaling property
Wholesaling real estate is an active investment strategy where you market to off-market property owners negotiating the purchase of their property at a discounted price. After getting the property under contract, you assign, or wholesale, the contract to an end third-party buyer for a higher price, earning a fee from the difference.
As an investor, I've wholesaled both property and mortgage notes, earning a double-digit wholesale fee for my time and marketing efforts more than doubling my initial investment. Considering your costs for marketing to potential sellers, expect to spend a few thousand dollars. But one deal alone can net $10,000 or more, making it a super viable and profitable way to double your money.
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3. Buy rental real estate
Rental properties can be an extremely lucrative real estate investment. Not only do they provide passive income through rental cash flow, but they also come with tax advantages and the potential for appreciation. In 2021, homes appreciated at 19% on average year over year. This is hardly close to doubling, but given appreciation over 10, 20, or 30 years, it's not uncommon for an investment to double itself with time.
4. Rehab a property
In our red-hot real estate market, you don't have to do much to see an increase in a property's value. But if you purchase a property in need of repair at a discount and make improvements to add value, you can really see property values rise. Plus, if you utilize private capital or hard-money loans, these investments can easily double your money. Flipping real estate isn't as easy as a lot of the home network shows make it seem, but if you know what you're doing, it can be a worthwhile way to invest in real estate.
5. Start investing
Money doesn't just double itself -- you have to actively put the money to work to turn $100 into $200. So the most important step is to simply get started. With enough time, most investments will double themselves.
Make sure you are setting aside money for investing, which hopefully is in addition to other retirement savings. If desired, there are retirement accounts such as a self-directed IRA that allows you to invest in real estate through a retirement plan. This can give you the best of both worlds if you want to diversify into real estate.
