Real estate investing examples show how everyday people build long-term wealth through property ownership. Some investors buy rental homes. Others flip houses for quick profits. Many prefer hands-off options like REITs or crowdfunding platforms. Each approach offers distinct advantages depending on budget, risk tolerance, and time commitment.
This guide breaks down four popular real estate investing strategies. Readers will learn how each method works, what returns to expect, and which approach fits different investor profiles. Whether someone has $500 or $500,000 to invest, there’s a property investment path worth considering.
Key Takeaways
- Real estate investing examples include rental properties, house flipping, REITs, and crowdfunding—each suited to different budgets and risk tolerances.
- Rental properties generate steady monthly income and long-term appreciation but require hands-on management or hiring a property manager.
- House flipping can yield $20,000–$50,000 per project but demands construction knowledge, capital, and a strong understanding of local markets.
- REITs let you invest in real estate with as little as $100 while enjoying stock-like liquidity and 4–8% dividend yields.
- Real estate crowdfunding platforms like Fundrise allow entry points as low as $10 but typically lock up your capital for 3–7 years.
- Whether you have $500 or $500,000 to invest, there’s a real estate investing example that fits your financial goals and lifestyle.
Rental Properties
Rental properties represent one of the most common real estate investing examples. An investor purchases a residential or commercial property, then leases it to tenants. The tenant’s monthly rent covers the mortgage, taxes, insurance, and maintenance costs, ideally with money left over.
How Rental Property Investing Works
The process starts with finding a property in a desirable location. Investors analyze potential rental income against expenses to calculate cash flow. A property that generates $1,500 monthly in rent but costs $1,200 in total expenses produces $300 in positive cash flow.
Many investors use leverage to buy rental properties. They put down 20-25% and finance the rest. This means a $200,000 property requires roughly $40,000-$50,000 upfront. Over time, tenants essentially pay off the mortgage while the property (hopefully) appreciates in value.
Pros and Cons of Rental Investing
Rental properties offer several benefits:
- Steady monthly income stream
- Tax deductions for mortgage interest, repairs, and depreciation
- Long-term appreciation potential
- Control over the investment
But, landlords face challenges too. Vacancies, problem tenants, and unexpected repairs eat into profits. Being a landlord requires time, patience, and often a strong stomach. Some investors hire property managers, though this typically costs 8-10% of monthly rent.
For hands-on investors with capital and patience, rental properties remain a proven wealth-building strategy. This real estate investing example has created more millionaires than perhaps any other method.
House Flipping
House flipping offers a faster-paced real estate investing example. Investors buy undervalued properties, renovate them, and sell for a profit. The typical flip takes 3-6 months from purchase to sale.
The Flipping Process
Successful flippers follow a specific formula. They find distressed properties selling below market value, often foreclosures, estate sales, or homes needing significant repairs. After purchase, they renovate strategically, focusing on improvements that add the most value per dollar spent.
Kitchens and bathrooms typically deliver the best returns. Fresh paint, new flooring, and updated fixtures transform dated homes. Smart flippers avoid over-improving for the neighborhood. A $100,000 kitchen in a $250,000 neighborhood rarely makes financial sense.
Profit Potential and Risks
The 70% rule guides many flippers. They pay no more than 70% of a home’s after-repair value, minus renovation costs. So a house worth $300,000 after repairs, needing $50,000 in work, shouldn’t cost more than $160,000 to purchase.
Flipping profits vary widely. Some investors make $20,000-$50,000 per flip. Others lose money when renovations exceed budgets or markets shift. This real estate investing example requires:
- Construction knowledge or reliable contractors
- Access to capital (cash or hard money loans)
- Strong local market understanding
- Willingness to take calculated risks
Flipping isn’t passive income. It’s more like running a small business. But for those with the right skills and market conditions, it can generate substantial returns quickly.
Real Estate Investment Trusts (REITs)
REITs provide a completely different real estate investing example. These companies own, operate, or finance income-producing properties. Investors buy shares like stocks, gaining exposure to real estate without buying physical property.
How REITs Work
REITs must distribute at least 90% of taxable income to shareholders as dividends. This requirement makes them attractive for income-focused investors. Many REITs yield 4-8% annually through dividends alone, plus potential share price appreciation.
Investors can choose from several REIT categories:
- Residential REITs own apartment complexes and rental communities
- Retail REITs hold shopping centers and malls
- Office REITs invest in commercial office buildings
- Healthcare REITs own hospitals, senior housing, and medical facilities
- Industrial REITs focus on warehouses and distribution centers
Benefits of REIT Investing
This real estate investing example offers unique advantages. Investors can start with minimal capital, sometimes under $100. Shares trade on major exchanges, providing liquidity that physical property lacks. Someone can sell REIT shares in seconds: selling a house takes months.
REITs also provide instant diversification. A single REIT might own hundreds of properties across multiple states. This spreads risk far beyond what individual investors could achieve on their own.
The main drawback? Less control. REIT investors don’t choose which properties to buy or how to manage them. They’re trusting professional management teams to make smart decisions. For passive investors seeking real estate exposure without landlord headaches, REITs make excellent sense.
Real Estate Crowdfunding
Real estate crowdfunding represents a newer investing example that’s gained popularity since 2012. Online platforms pool money from multiple investors to fund property purchases or developments. This approach sits between direct ownership and REITs on the involvement spectrum.
Popular Crowdfunding Platforms
Several platforms dominate this space. Fundrise allows investments starting at $10, making real estate accessible to almost anyone. CrowdStreet targets accredited investors with larger minimums but potentially higher returns. RealtyMogul offers both options depending on investor qualifications.
These platforms typically offer two investment types:
- Equity investments give investors ownership stakes in properties. Returns come from rental income and appreciation.
- Debt investments function like loans to developers. Investors receive fixed interest payments.
What Returns Look Like
Historical returns vary by platform and investment type. Fundrise has reported average annual returns between 7-12% over various periods. Individual deals on other platforms might target 15-20% returns, though with higher risk.
This real estate investing example suits people who want more involvement than REITs offer but can’t afford entire properties. Minimum investments typically range from $10 to $25,000 depending on the platform and deal.
Liquidity remains the biggest concern. Unlike REITs, crowdfunding investments often lock up capital for 3-7 years. Early withdrawal either isn’t possible or comes with penalties. Investors should only commit money they won’t need short-term.
