Binyamin Mellish House Invest $100,000 in real estate properties

If you’ve gotten to the point in your life where you have $100,000 to invest, you’re already well on the road to financial success. It’s a bold step to take when you decide to invest $100,000. However, with the right investments, the initial $100,000 can turn into much more.

Investing money in a good investment will increase your earnings massively. However, it’s important to know that not all investments are made equal. As an investor, you must put your money in the right places to turn it into a million-dollar investment. This guide will provide you with some things to consider when looking at how to invest 100k for passive income. So, stay tuned as we get started.

What Is the Best Way to Invest $100k in Real Estate?

The most common ways to invest in real estate include real estate syndications, crowdfunding real estate, traditional property investment, and REITs. Each has its own set of risks, requirements, issues, and opportunities for earning a passive return. Let’s take a look at each one.

Real Estate Syndication

If you wish to diversify your investment portfolio consider investing through a real estate syndication. A real estate syndication occurs when a group of investors pool their funds to purchase a significant piece of real estate property. It offers investment options in apartment buildings, mobile home parks, land, and other assets.

There are two parties involved in a real estate syndication project– A passive investor and a syndicator. As a passive investor, your sole responsibility is to invest funds in a solicited real estate investment for a specified return.

On the other hand, a syndicator is the manager of the investment and has a fiduciary obligation to define the returns and risks to investors, as well as to protect their investment. The syndicator is also in charge of managing the investment property, disbursing funds to the multiple investors, administering finance, and selling the investment.

Notable benefits involved in real estate syndication investment include regular cash flow, tax benefits, as well as the potential for capital gains. If you’re interested in joining a real estate syndication platform, consider checking out Peoples Capital Group.

Real estate crowdfunding with 100k to earn passive return

Real Estate Crowdfunding

Crowdfunding is a novel approach to real estate investing where people pool their funds to participate in larger real estate projects. The initiative receives funding from various sources.As a passive investor, you can be rewarded or earn a fixed amount as a return. The concept enables you to take part in residential real estate transactions that you would not have been able to accomplish because of the high sums of money required.

Real estate crowdfunding can generate a significant amount of cash for investors. Our advice is to do enough research and make sure that the crowdfunding platform you decide to invest in understands what they’re doing and is building or investing in the right markets.

Traditional Real Estate (House Hacking)

Purchasing a single-family home, townhouse, or apartment, living there until you outgrow it, and then holding onto it as a private real estate investment property rather than selling it to buy a new home is one way to invest in traditional real estate. ‘

As an investor, if you buy in the right real estate market, renting out your property can help you to generate passive monthly income, pay taxes, and pay off your mortgage among other benefits.

Whether you choose to take on the responsibilities of being a landlord yourself or hire a property management firm is up to you. Whatever you choose, ensure you run the numbers to avoid losing money. Holding onto quality real estate investments for the long term is the best method to build wealth and generate active income from your investment.

Real Estate Investment Trusts (REITs)

REITs (real estate investment trusts) are companies that sell shares in their real estate holdings. Rather than acquiring an apartment or a home to generate passive income, REITs allow real estate investors to participate in larger real estate developments.

If you’re looking to get rewards for your real estate investing, REITs may be an option. However, since you will have little control over where your money goes, it is vital to do your homework before investing in a REIT.

A savvy investor that just bought a piece of real estate with 100k

Other Ways to Invest Your $100k for Passive Income

There are different ways of diversifying your investment portfolio. If you have been wondering how to invest 100k for passive income there are some notable investments that would be beneficial to you below.

Invest in Stocks

Stock investments are an excellent way to diversify your portfolio. It allows you to own a part of the business. What’s more, the returns are usually fairly good. However, the returns fluctuate from year to year if nothing else occurs. If you reinvest your earnings, you may make capital gains, which only increase in value over time.

In addition to long-term development potential, you can maintain a high level of liquidity. As an equity investor, you can sell your holdings in a matter of hours, if not minutes. As a result, you have the opportunity of accessing your funds far more quickly compared to other forms of investment, especially if you buy high growth stocks.

The good thing about dividend paying stocks is that you don’t need a large sum of money to get started. The key is to get started, and excellent investments will begin to compound themselves over time.
To be clear, individual stocks are a high-risk investment. The stock market ebbs and flows, and so does your money. As a result, most passive investors prefer investing huge sums of money in mutual funds rather than individual stocks or better still, in real estate.

Peer-to-peer lending option to invest 100k and earn passive income

Invest In P2P Lending

P2P lending, often known as peer-to-peer lending, is the practice of lending personal loans to individuals or businesses through Internet services that connect lenders and borrowers. As a passive investor, you can serve as the bank in certain situations using proportional ownership interest.

Today, peer-to-peer investing is a highly appealing option to invest $100,000. The investment time frame is short (typically a few months), and the risk is compensated by the possibility of gaining possession of the subject property if things go wrong.

Furthermore, this investment strategy is quite passive. As a passive investor, you will only have to evaluate your borrowers and the properties you’re investing in before releasing your personal finance.

The importance of vetting borrowers can’t be overstated, as they will affect the outcome of your investment, so make sure you are comfortable with whoever you are entrusting your funds to or simply leave your money in your retirement account.

ETFs and Mutual Funds

If you feel that investing in stocks is volatile consider buying mutual funds and exchange traded funds (ETFs) to diversify your portfolio. Investing in ETFs is highly recommended for diversifying your stocks.

Exchange traded funds work like mutual funds and other index funds because mutual funds bring diverse investments together regardless of their size or form. It’s true that as index funds, both ETFs and mutual funds appear similar, but most investors prefer mutual funds because they offer higher reward.

Mutual funds and ETFs are excellent retirement planning tools. Investing in an index fund like an ETF will aid your retirement savings when you’re ready to stop working.

Despite the benefits of investing in mutual funds and ETFs, some risks are involved. For example, your share’s market value might be worth less when you decide to sell them. Therefore, consider talking to some investment advisors before proceeding with an investment.

Annuities

For new investors seeking ways to spread their investment fund, annuities are another option to consider. Annuities are excellent investment options, especially for investors that want a continuous income stream during their retirement.

You might be asking, what are annuities? Simply put, annuities are insurance products. Seeing as they aren’t equity investments, they don’t have high growth, but are guaranteed to ease you into retirement without financial stress.

Annuities are the perfect way to add money to your retirement accounts. Besides having little to no risk involved, they provide the investor with an income stream that continues even after retiring. Thus, it’s best to consider fixed annuities as a great long-term investment vehicle.

However, don’t forget to seek independent financial advice from your financial advisor before you proceed.

Emergency Funds

Emergency funds will make the difference between living comfortably and running around for financial assistance when trouble hits.

With $100,000 you may want to put some in an emergency fund. Seeing as life is full of uncertainties, you’ll need this fund to counter adverse conditions. When investing in an emergency fund, consider diversifying your investments or selecting a medium famous for positive dividends.

While a registered investment advisor will advise you not to invest the whole $100k (and we agree) you can take out some part of it and protect yourself from any adverse economic condition that might appear in the future.

Invest Through a Robo Advisor

If you don’t want to be a do it yourself investor Robo advisors are digital platforms that can help make your investing journey easier. As a platform providing algorithm-driven, automated financial planning services, Robo advisors require little or no human supervision.

Robo advisors collect information from the user regarding their future goals and financial situation through an online survey. This data is used to offer financial advice and automatically invest the user’s assets.

On the other hand, suppose you want a more hands-on option, consider investing in a business or go into venture capital. Although capital intensive, this investment option will enable you to generate as much cash flow as possible if you manage it well.

High Yield Savings Account

While you might be tempted to leave your $100k in a savings account pending when you will use it for a suitable investment, we recommend earning more profit from a high yield savings account. Interest from a high yield savings account is 20 to 25 times higher than a low interest savings account, regular bank accounts, or taxable brokerage accounts. Stablecoins in the cryptocurrency space can be some of the best options for a high yield savings account.

If you’re wondering what high yield savings account to choose we recommend CIT Bank’s Savings Builder account.

Invest in Cryptocurrencies

Investing in cryptocurrencies is another great option to diversify your $100,000 investment for passive income. It’s important to buy at the appropriate time and with the right cryptos if you want to expand your portfolio. This market has the propensity to be volatile.

While sharp rises can bring significant payoffs at any time, an investor can easily lose money during a dip. Due to this volatility, as well as the inherent regulatory risks in what is a parallel financial system outside of the supervision of governments and regulators, it’s better to invest only in assets that you intend to hold for an extended period.

Ultimately, investing in cryptocurrencies is a good investment but real estate investment seems better because the market is more stable compared to the instability of the crypto market.

Easy passive investments to do with 100k and grow your money

Factors to Consider Before Investing Your $100,000

Before you think of investing your $100,000 for a passive return, you need to consider some important factors so you don’t regret your decision. With that in mind, let’s have a look at these factors below.

1. What Kind Of Investor Do You Consider Yourself to Be?

Depending on the type of investor you are, you can invest in various ways. Consider opening an account with a brokerage if you prefer to conduct your own research and like to be significantly involved in the decision-making process for the investments you make. This path will provide you with the details you need to make informed decisions about your financial options.
Robo investors are another alternative if you like to take a step back and follow a basic investment strategy. While you sit back and watch your money grow, Robo investors invest for you based on your plan and objectives. They do, however, charge for their services. So, it’s up to you to know the kind of investor you intend to be.

2. Do You Have a Certain Deadline in Mind?

The length of time you intend to hold an investment is referred to as your timeline. If you know you’ll need your money sooner rather than later, it’s a great idea to go with a less aggressive investing strategy.
The amount of time you have to invest has an impact on where you invest. If you intend on saving for a long-term project, you can go for a more aggressive investing strategy because you’ll have a good idea of how long you’ll keep your assets.

3. Are You Willing to Take a Certain Number of Risks?

You can also decide to calculate your total risk tolerance. If you can’t afford to lose your money, you have a low-risk tolerance. If you are largely unfazed by the loss of your investment, your risk tolerance is relatively high.

4. What Are Your Financial Objectives?

You should develop an investing strategy based on your financial goals. Write down your financial goals for the next five, ten, 20, and 30 years, based on where you are now and where you plan to be in five, ten, 20 , and 30 years. After you’ve defined your objectives, it’ll be a lot easier to decide how to invest your $100,000.

5. What Kind of Conditions Are You Considering?

Consider your age, overall health, annual earnings, and family situation before investing. Do you expect to inherit something in the future? If so, you need to set some conditions for your investment portfolio. Meanwhile, if you are confident that you have enough money to be comfortable if your assets fall for some time, consider a more aggressive approach.

The Bottom Line

Consider yourself lucky if you’ve come across $100,000 in spare cash. At the end of the day, the best approach when considering how to invest 100k for a passive income is up to you. That is because everyone’s financial circumstances are unique.

The choice is yours, but the good news is that a diversified portfolio, especially in real estate will greatly enhance your portfolio. In essence, there are a significant number of investments that can help you earn a passive return with your $100,000, but property investment appears to be the most stable.
So, you should focus more on real estate because you’re investing in physical assets that will likely appreciate over time. Likewise, contact financial advisors for additional details on how you can diversify your portfolio and become a successful real estate investor.

If you have saved up to 100k and want to grow your fund so you can enjoy your retirement without financial stress, Peoples Capital Group is here to help you own one or multiple investment properties. While it might feel too good to be true, you can achieve a lot with that much money so contact Peoples Capital Group today!

Aaron Fragnito

Aaron Fragnito

Aaron has been helping people invest in Real Estate for over 10 years. He is a Co-Founder of Peoples Capital Group (PCG) a real estate investment and holding company. He is a full time real estate investor, as well as, the host of the New Jersey Real Estate Network and host of the Passive Cash Flow Podcast. Aaron has previously completed over 100 real estate transactions as a realtor and another 150 transactions in his current role as a real estate investor.

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