Looking to diversify your retirement portfolio or park your money where it will work harder for you? In this article, we’re going to share five of the best real estate investments right now. Keep reading to learn the ins and outs of each of these strategies, their pros and cons, and the best markets to invest in!
Summary:
Real estate investing is a powerful wealth-building tool you can use to diversify your investment portfolio and reduce the risk of a large loss.
Some real estate investments, like REITs and private money lending, are passive and allow you to earn money through dividends and interest payments. Other investments, like rental properties, can give you cash flow, appreciation, and tax benefits, which you can’t get with stocks and most other investments!
What are the best ways to invest in real estate in 2025? Here are five top options to consider!
A turnkey rental is a newly built or renovated property that you buy with management and tenants already in place. These low-maintenance properties give you passive or semi-passive income, have relatively low turnover, and give you all the benefits of property ownership.
With Rent to Retirement, you can put as little as 5% down on a new build. That’s significantly lower than the amount you’ll need for most investment property down payments and even some passive investments!
Browse Rent to Retirement’s high-cash-flow turnkey rentals!
There are several reasons why many investors prefer turnkey rentals:
Turnkey rentals are some of the best real estate investments right now, but there is one trade-off:
A small multifamily property is a building with 2-4 units (sometimes called a duplex, triplex, or fourplex). You can treat it as a normal investment property by placing tenants in each of the units, or you can put as little as 3.5% down with the house hacking strategy—making it your primary residence, living in one unit, and renting out the other units to help offset your mortgage payment.
Small multifamily properties offer the following benefits to investors:
Here are a few disadvantages to be mindful of before buying a multifamily property:
Put less money down with Rent to Retirement’s 5%-down financing options!
Real Estate Investment Trusts (REITs) are companies that own and manage real estate. As the investor, you buy shares of these companies and receive dividends since REITs are legally obligated to distribute at least 90% of their taxable income. Keep in mind that you are investing in the company and not the real estate itself, so you have no control over how properties are managed or when they are sold.
REITs are some of the best hands-off investments and have the following advantages:
While REITs require very little time or energy on the investor’s end, there are a few drawbacks:
Private money lending is when you lend your own capital to other investors for house flips, renovations, and other real estate-related projects. Most terms range from a few months to a few years, and as the investor makes payments, you recoup your initial investment with interest. Today, private money lenders can expect to make returns upward of 10%!
Here are a few reasons why you might lend out your private capital to other investors:
Make sure you’re aware of the potential pitfalls of private money lending:
House flipping is an investment strategy that involves buying a distressed or undervalued property, renovating it to increase its value, and selling it for a profit. These projects are typically turned around within a few months to a year, and depending on local market conditions, experienced investors can make a large profit in a relatively short amount of time. In Q2 of 2024, house flipping delivered an average return on investment (ROI) of 28.7%!
Flipping houses is a lucrative strategy for the following reasons:
This strategy isn’t for everyone, so make sure you know what you’re getting into:
Don’t want to deal with renovations and other headaches? Check out our hands-off turnkey investments!
Now that you know what to invest in, where should you invest? There are thousands of markets across the US, but here are a few of the best real estate investment markets for 2025:
Florida has no state income tax and relatively low average property taxes at 0.82%, making it one of the top states for real estate investors. It’s also one of the fastest-growing states in the US and home to some of the nation’s top vacation markets!
There are several advantages to investing in Florida real estate:
Where is the Florida housing market headed in 2025? Check out our full review!
Did you know Rent to Retirement offers new-build turnkey rentals in Florida?
Despite having one of the nation’s highest property tax rates, Texas, like Florida, has no state income tax and very landlord-friendly housing laws. What’s more, the “Lone Star State” is the fastest-growing state in the US and has strong rental demand.
Many investors own real estate in Texas for these reasons:
Find out why investors are flocking to the Texas housing market in 2025!
The South is the fastest-growing region in the US, and South Carolina is no exception. Its blend of below-average home prices and high appreciation makes it one of the best real estate investment markets today.
South Carolina real estate investors benefit from the following:
Check out our full list of the best states to buy rental property in 2025!
If you want to build wealth through real estate, turnkey rentals are a no-brainer. With property management and tenants already in place, these investments require very little work on your end. Because you own the property directly, you’ll get cash flow, appreciation, and tax benefits unique to active real estate investments.
With Rent to Retirement’s 5%-down financing for new builds, you can bring even less money to the closing table!
Turnkey rentals are some of the best real estate investments, as they give you all the benefits of property ownership—cash flow, appreciation, and tax advantages. These properties are more passive than most rentals, as they are professionally managed and require less maintenance!
The 2% rule states that a rental property should generate 2% of the purchase price in monthly rent. This means that if you buy a $200,000 rental property, it should bring in $4,000 per month. Keep in mind that this rule is outdated and very difficult to achieve in today’s housing market!
Yes, it’s still a good time to invest in real estate, largely due to the lack of competition caused by high interest rates and rising home prices. If you have the means to invest in 2025, you could buy an appreciating asset without overpaying for it.