3 Unique Ways to Invest in Real Estate

If you want to get into the real estate game and don’t know where to start, that’s understandable. This is a massive market with so much complexity that it can be overwhelming to anyone. Most people choose specific areas to focus on because real estate as a whole is simply too broad a field. 

When it comes to investing, the average person might think fixing and flipping homes is all there is to it. However, this is a market that allows for a surprising amount of flexibility, despite how illiquid owning property can seem. In this article, let us explore three unique ways that you can get in on the juicy real estate action. 

1. Fractional Investments

Have you heard of something called the Delaware Statutory Trust in real estate? If not, it’s something you’re going to want to learn about. It’s a sort of investment vehicle that makes it possible for multiple investors to buy up small portions of real estate. 

The key benefit here is that this allows you to access properties that you would never be able to afford otherwise. 

According to 1031 Crowdfunding, many real estate investors choose this type of investment due to the potential returns it offers. They explain that there’s no need for unanimous owner approval. Also, there are easier financing options and no minimum investment is needed. 

Moreover, you bypass one of the most frustrating aspects that traditionally come with investment in property, which is management. Fractional investments in real estate often have it so that you never have to worry about the logistics of tenant or lease management. 

2. Vacation Rentals

This is one investment option that can potentially give you high returns. It’s different from regular rental properties because you can generally charge higher fees for vacation homes and also capitalize on seasonal demands. Did you know that by 2031, the global vacation rental market is set to hit $130.98 billion? This is no small niche to explore. 

Typically, one of the disadvantages of investing in rental property is that you don’t get to use said property yourself. Your tenants occupy it, and that means it’s not really in your hands until they move out or you evict them. With vacation rentals, you can have your cake and eat it too. During the off-season, you are free to make use of it, and you only have to leave for a few months. 

If you live in a city or region with a lot of tourists, this is one investment option to consider. That said, you do want to remember that marketing will be a responsibility on your head. This can sometimes be a little frustrating, but considering it’s only for a few months, it’s not too bad. 

3. Investing in Farmland  

If you are particularly risk-aversive, one of the safest real estate investments you can make is in farmland. Agricultural land is known to show steady growth, and you can easily make leasing agreements with farmers. Another great advantage of farmland is that its value increases with inflation. This is why it’s often used as a hedge against inflation. 

Investing in this option is also one of the best ways to diversify your investments. It has a relatively low correlation with other assets and also comes with a number of tax incentives. 

Some examples of these benefits include lower assessment rates, mortgage interest deductions, and estate tax exemptions. In 2017, the exemption amount was only $5,490,000, but today, in 2024, it’s more than doubled to $13,610,000. 

Another slept-on benefit is the value of farmland, which is intrinsic and connected with its ability to be a productive asset on its own. In 2023, the average value of U.S. farmland was approximately $4,080 per acre. This was a 7.4% increase over 2022 values. 

In contrast, most other real estate options are tied to how the market is doing. This is why farmland has a history of doing well during times of economic crisis and recession.

To summarize, there are plenty of interesting ways to invest in real estate. People often follow the crowd, but there lies the trap. So many people try to fix and flip homes and try to time the market, but these methods aren’t without risks. 

When you consider that so many interesting real estate investment options exist, it’s a good idea to explore and understand them for what they’re worth.