If you grew up thinking real estate investing meant buying a duplex with cash and fixing toilets at midnight, you are not alone. The good news is that the old model is only one of many paths today. Some beginner options take less than $100 to start.
This guide walks through how to get started in real estate investing across five different routes, from the most passive to the most hands-on. We will cover the cost, work, and risk for each so you can pick the path that fits your life and your credit profile. If you are completely new to putting money in markets, our broader how to invest primer is a good starting place.
The easiest entry point is publicly traded REITs, which you can buy through any commission-free brokerage like Robinhood — a single share gets you a slice of hundreds of income-producing properties with no minimums.
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Why Real Estate Belongs in Your Plan
Real estate has historically delivered three things stocks do not always offer in the same mix: income from rent, appreciation in property value, and tax benefits from depreciation. It also tends to move differently from the stock market, which can lower the overall volatility of your portfolio. For a wider look at income strategies, our guide to passive income covers rent, dividends, and more.
That does not make real estate risk-free. Property values can fall. Tenants can default. Crowdfunded deals can lose money. Treat every option below as part of a balanced plan, not the whole plan.
Option 1: Real Estate Investment Trusts (REITs)
A REIT is a company that owns income-producing real estate, like apartment buildings, warehouses, or shopping centers. You buy shares of the REIT just like a stock through any brokerage account.
Publicly traded REITs are the easiest entry point. You can buy a single share of a REIT ETF like VNQ for under $100 and own a tiny slice of hundreds of properties. By law, REITs must distribute at least 90% of taxable income as dividends, so cash flow can be strong. If you are still deciding between funds and individual stocks, our ETF vs stock comparison is worth a quick read.
Pros: Very low minimum, fully liquid, no landlord work.
Cons: Share price moves with the stock market in the short run, less tax-efficient than direct ownership, dividends are taxed as ordinary income.
This is the simplest place to start if you want real estate exposure today.
Option 2: Real Estate Crowdfunding Platforms
Crowdfunding platforms pool money from many small investors to buy properties or fund developments. The two best-known platforms for beginners are Fundrise and Arrived.
Fundrise lets you start with as little as $10 and invests across a diversified portfolio of private real estate, including apartments and single-family rentals. Returns come from rent distributions and property value gains. The tradeoff is illiquidity. You cannot sell shares like a stock, and withdrawals can take weeks or months.
Arrived focuses on shares of individual single-family rental homes and vacation rentals. Minimums start around $100 per property. You collect a share of rent and a share of appreciation when the home is sold. Holding periods are typically 5 to 7 years.
Pros: Low minimums, true private real estate exposure, no landlord work.
Cons: Illiquid, fees can be 1% or more per year, returns are not guaranteed.
If you have a few thousand to deploy, our breakdown of how to invest $1000 shows how to split capital across these kinds of platforms and broader funds.
Option 3: Turnkey Rental Properties
A turnkey rental is a single-family or small multifamily property that comes already renovated and tenanted. A property management company runs the day-to-day so you can own from out of state.
This route requires real capital. You typically need a 20% to 25% down payment on an investment loan, plus closing costs and reserves. On a $200,000 property, that is $40,000 to $50,000 out of pocket before you collect a single rent check. Before you commit a chunk of savings this large, weigh the tradeoff in our saving vs investing guide.
Turnkey is the most traditional path. You build equity, collect rent, and can refinance later. Mistakes are expensive, so screen the operator carefully and run conservative numbers. Vacancy, repairs, and management fees typically eat 30% to 40% of gross rent.
Option 4: House-Hacking
House-hacking is the fastest path to real estate for first-time buyers. You buy a duplex, triplex, or fourplex, live in one unit, and rent out the others. You can also rent out spare bedrooms in a single-family home.
The big win is financing. As an owner-occupant, you can use an FHA loan with as little as 3.5% down, or a conventional 5% down loan, instead of the 20% to 25% required for investment property. On a $300,000 duplex, you might only need around $10,500 down with FHA.
If the rent from the other units covers most of your mortgage, you live very cheap or even for free. After 12 months, you can move out and keep the property as a pure rental. Many real estate investors started exactly this way.
Option 5: Real Estate Notes and Lending
If you want income without owning property, you can lend to other real estate investors. Platforms like Groundfloor let you fund short-term real estate loans starting at $10 per note, with target returns in the high single digits.
This is closer to fixed income than equity real estate. You earn interest, not appreciation. Risk is concentrated in borrower default and the value of the underlying property. Spread across many notes to lower single-deal risk.
Not every state allows every platform, so check the eligibility before signing up.
How to Pick Your First Move
Ask yourself three questions before committing capital.
- How much can I invest? Under $1,000 fits REITs or crowdfunding. $10,000 to $20,000 opens diversified Fundrise positions or several Arrived homes. $40,000 or more starts to open turnkey rentals and house-hacking.
- How hands-on do I want to be? REITs and crowdfunding are passive. Turnkey rentals are semi-passive. House-hacking is the most hands-on, especially while you live there.
- What is my time horizon? Public REITs are liquid. Private deals lock up your money for 5 years or more. Match the deal length to when you might need the cash.
Whichever path you choose, do not borrow against credit cards to fund a real estate deal. The math almost never works once you factor in the interest. If you want to pair real estate with a diversified stock portfolio, see our roundup of the best index funds for beginners.
Why Your Credit Score Matters in Real Estate
Every serious real estate path eventually runs through your credit. Mortgages, HELOCs, and even some crowdfunding accounts pull your credit report. A higher score means lower rates and bigger approval amounts. On a $300,000 mortgage, the difference between a 660 and a 760 score can be hundreds of dollars per month for 30 years.
If your score is thin or under 700, build it before you shop for a loan. While you are growing a portfolio, products like the Self Visa® Credit Card or Kikoff Secured Credit Card help you build credit at the same time.
The Self Visa pairs with a small credit builder account that reports to all three bureaus. Kikoff Secured Credit Card has no annual fee and lets you start with a small refundable deposit. With on-time payments and low utilization, either tool can move a thin file in a few months. For ongoing monitoring and credit advice, Creditship.ai is a strong free resource.
Firstcard pulls credit-building features and money tools into one app made for people new to credit. Terms and conditions apply for any credit product, and APRs vary by creditworthiness.
Frequently Asked Questions
How much money do I need to start investing in real estate?
You can start with as little as $10 on a crowdfunding platform like Fundrise or with a single share of a REIT ETF. Turnkey rentals and house-hacking require significantly more, typically $10,000 to $50,000 or more for down payment and reserves.
Is a REIT or rental property better for beginners?
REITs are easier and more liquid, making them a strong first step. Rental properties can deliver higher returns and tax advantages but require capital, credit, and time. Many beginners start with REITs and add direct property later.
Do I need good credit to invest in real estate?
Not for REITs or most crowdfunding platforms, since you are buying shares with cash. You absolutely need good credit for any path that involves a mortgage, including turnkey rentals and house-hacking. Higher scores unlock lower rates and bigger loan amounts.
What is the safest way to invest in real estate as a beginner?
Diversified public REIT ETFs are typically the lowest-risk entry point. You get exposure to hundreds of properties for under $100 and can sell anytime. Lower risk does not mean no risk, since share prices can fall in any market downturn.
