Josh Dorkin runs a real estate investment website called Bigger Pockets. NPR's Uri Berliner asked him what kind of real estate bet he could make for $1,000. His advice: Be careful.
"You could go and flip a house. Of course, you'd need to go out and take out a high-risk loan more likely than not to do that and of course doing that is really kind of like running a job in itself," he said. Scratch that.
"Other options include crowdsourcing or syndication," he added. Too complicated.
He concluded, "And I think the final option is really to go out and buy shares of a REIT — real estate investment trust."
REITs are trusts that own and develop property and earn rental income. Most of it gets passed on to investors.
"They are forced by law — a law created in 1960 — that provides that real estate investment trusts have to meet certain tests," says Brad Thomas, editor of the Intelligent REIT Investor. "And if they do, they are forced to pay out 90% of their taxable income in the form of dividends."
To read more about why REITs are so attractive to investors, click here.