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The Playbook

Renovations

Judy Dutton

theplaybookmb.com

 in Des Moines, IA, in the spring of 2023, real estate investor 

 made the dubious decision to take his work home with him: by moving into his flip.

For two years, Naig worked, ate, showered, and slept in his own unfolding construction zone. His wife, business partner, and designer, Danielle, lived in a 

 flip next door, while their 6-year-old daughter, Natalie, popped back and forth.

“My daughter and I lived in the basement for two months, as the upstairs of our home was gutted naked,” Naig recalls. “In our makeshift bedroom in the basement with no windows, we were tested to the outer limits of our sanity during the Iowa winter. We even turned the attic into a temporary bedroom at the last minute, which made things more complicated but spared us hotel nights.”

“It was a financial choice: Living there meant we would be sitting pretty on the $500,000 tax-free capital gains exclusion on a primary residence,” Naig explains. “It also lowered holding costs dramatically—no more supplementary rents or mortgage payments on a second residence during renovations—and put us at the scene early enough to catch crucial problems, such as water damage during storms.”

In the end, Naig’s decision to camp out in his renovation paid off.

“In 2025, we listed for $285,000 and took $280,000 after one weekend of showings, pocketing about $70,000 in profit, all of which was eligible for the primary residence exclusion,” Naig says. “The project’s success was entirely based on the fact that we were living on site. The drawback is the practical life disruption: You move into a dump, endure noise and dust, only to have the bittersweet experience of leaving just as the space hits perfection.”

Although living in a flip may sound about as soothing as camping in a construction zone, the potential savings are tough to ignore. Between stubbornly high home prices, steep mortgage rates, ballooning construction costs, and slimming margins, house-flipping activity and profits 

 for years. Live-in flips keep the lights on and the ROI in positive territory.

“It kept costs tight and allowed me to manage the entire process without delays,” says investor 

, who moved into a flip he purchased in Port Richey, FL, for $185,000. Although he endured “showering with drywall dust in the air, eating around power tools, and dealing with constant noise,” he didn’t mind one bit once he sold for $297,000, netting $70,000 in tax-free profits.

The most significant advantage of turning your flip into your primary residence is the capital gains tax exemption ($250,000 for individuals and $500,000 for married couples, provided you live there for two years). Another perk is more favorable home loans. Naig secured an FHA 203(k) loan, which wraps purchase and rehab costs into one mortgage for primary residences; it helped keep interest rates below the traditional bridge loan he would have gotten otherwise.

Another benefit? “You know every nail and fixture by name, and you control the quality,” says 

, who cooked on a camping stove while living in his flip in Chattanooga, TN, for two years. Although he found living in a construction zone a “grind,” once he sold for $326,000, he admits, “the return made it worth every late night and drywall patch.”

“It’s one of the few strategies where a hands-on, budget-conscious approach can actually outperform more capital-intensive methods, but only if you’re scrappy enough,” explains investor Catherine Mack at 

. “Many first-time investors underestimate the hassle of renovating a house while living in it.”

And even once the ordeal is over and you move out, you might actually miss the place, now that you've spent so much time there getting it into shape.

“The hardest part is right at the end,” Stephenson admits. “Just as the house becomes exactly how you want it, you hand over the keys and walk away.”

But when asked if he would do it again, Stephenson replied, “I already am.”

Curious to learn more? Here’s a guide to the 

Live-in flip: The pros and cons of living in your flip

Investors are moving into their renovations. Here’s what they save—and sacrifice.

“I survived living in my flip”

Prison may seem like the last place anyone would want to live, but a renovated lockup in Virginia boasts a waiting list.

After sitting vacant and crumbling for years, the Lorton Reformatory prison complex underwent an HGTV-worthy makeover into 

, with 165 one- and two-bedroom units renting for $1,372–$2,700 per month. Although bars remain on the windows to preserve this penitentiary’s dark past, the interiors are light-filled and loft-like, surrounded by lush courtyards, a pristine swimming pool, plus a commercial area nearby full of restaurants, retail shops, a yoga studio, and even a preschool and playground.

This remarkable transformation comes courtesy of the 

, which specializes in urban development and historic preservation, and is a prime example of “adaptive reuse,” the practice of breathing new life into old buildings by giving them a new purpose. Here’s how development project manager David Vos tackled this unique renovation, and why it could be the key to solving America’s housing shortage.

How did this prison end up getting turned into apartments? 

“The idea of adaptively reusing the Lorton Reformatory was shaped by a citizen task force working with Fairfax County to explore potential reuses for the campus. Housing emerged as a priority. Transforming a former prison into housing is symbolic. It reflects a broader societal shift away from mass incarceration and toward reinvestment in communities.”

What changes did you make to the building?

 “Working within the framework of historic buildings meant that many elements, including window sizes and bars on windows, had to remain intact. The guard towers remain as visual landmarks, and we retained original signage where we could. Rather than altering the historic fabric, we focused on transforming the interiors into warm, livable spaces, investing in high-quality finishes for kitchens, bathrooms, and bedrooms—the everyday spaces that matter most to residents. We also prioritized community gathering spaces, like shared courtyards, green spaces, and lounge areas. We struck a balance: honoring the site’s history while concentrating on the human element and creating a place where people truly want to live.”

Did you face any challenges convincing lenders, investors, and tenants that this was a good idea? 

“It required creativity and persistence to give lenders and investors confidence in the vision. We approached the project with full awareness of the site’s difficult history. This was a place of hardship for many, and we didn’t try to erase that. We had quite a few conversations with our development partners about whether to embrace the former use in the branding, such as street and building names, but ultimately, we decided to liberate the campus from its former purpose and chose the 

 name in the branding, while preserving its historical character. In our marketing, we’ve been transparent about the building’s past, but we’ve also focused on what it represents now: renewal, resilience, and an opportunity to live in a unique space. And clearly, the community agrees—Liberty Crest consistently has a waiting list.”

The US clearly needs more housing. What else can be upcycled into residences? 

“We’ve been preserving historic buildings through adaptive reuse for over 40 years. We’ve converted everything from textile mills and shoe factories to train stations, theaters, power plants, and schools. And as office vacancies rise nationally, and our existing buildings continue to age, we believe more adaptive reuse into housing is not only possible but necessary. With the right mix of vision, creativity, and perseverance, nearly any historic building can receive a second chance at life. As for prisons, they’re certainly among the most challenging, but also the most powerful, symbolically.”

Do you hope to turn more prisons into nice apartments? 

“Not all prisons make great candidates for adaptive reuse. Lorton was unique because of its design. The Lorton Reformatory was commissioned in the early 20th century under President Theodore Roosevelt, who believed that natural light, fresh air, and a humane environment could play a key role in rehabilitation. As a result, the campus was designed with thoughtfully arranged buildings, open green spaces, and abundant daylight—qualities that translate well into residential use. This made the site an ideal candidate for adaptive reuse. Rather than demolishing the historic structures, we were able to preserve and repurpose them. At the same time, we created much-needed housing in a high-opportunity area, brought life to a previously sterile area, and eliminated Fairfax County’s financial burden of maintaining an underutilized asset.”

For a closer look at life behind bars, check out more before-and-after photos of Liberty Crest below.

This prison was turned into apartments

Who knew life behind bars could look so good? A surprising solution to the US housing crisis.

This prison was turned into posh apartments

When Bailey Hall bought a house near Seattle, sight unseen, the product manager was surprised upon visiting the property to find a small barn on its five acres. A huge fan of HGTV, she’d always dreamed of tackling her own home makeover, so despite having no background in renovation, she rolled up her sleeves and got to work. In April, about a year later, 

 made its debut on Airbnb as a rental alongside the 

, doubling Bailey’s income streams from one property. Here’s how she pulled it off and her advice for others who dare to dabble in DIY.

How did you end up turning a tiny barn into an Airbnb?

 “In 2021, I purchased a property for $410K that was converted and ready to go as an Airbnb rental. This was during the height of Covid, so housing demand was sky-high, and the market was very competitive. I took a huge leap of faith and put an offer on the property before seeing it. When I closed on the property and visited it, I was pleasantly surprised, especially when I found that there was also a small, dilapidated barn on the grounds. It was falling apart, but I instantly saw an opportunity to transform it into a second Airbnb rental. I grew up watching HGTV and had always wanted to do a home renovation project on my own. This was an opportunity to pursue my passion, while also generating additional income and expanding my Airbnb portfolio.”

 “My first challenge was figuring out how I would fund the renovation project. I had my own savings to help, but I still needed some additional funding to cover professional help and materials. I decided to take out a home equity line of credit (HELOC) on the property through 

 to help pay for the renovation project. A HELOC was the perfect choice for me because it was easy to access funds for the project, and it didn’t disrupt the low interest rate on my mortgage. It’s also worth noting that when I took out the HELOC about a year ago, the property’s value had skyrocketed to over $700K. This was great because I was able to access even more cash than I needed.”

What did you do to turn this little barn into a livable house?

 “Pulling off the renovation itself was quite the undertaking. The foundation was crumbling, and the deck started to fall off as well, so I used a large chunk of the funds to hire professional contractors. They handled a lot of the structural rebuilding, including the roof, foundation, electrical, and plumbing work. While contractors handled the structural rebuilding, I wanted to do a lot of the renovations on my own. I invested a lot of my time—lots of weekends and late nights and elbow grease to complete this dream project.”

Which renovations did you tackle on your own?

 “Among the many projects I handled myself: I did the demo wall construction, insulation, tiling, built-ins, flooring, and the fireplace on my own. I also moved windows so that I could install a library wall, which was the focal point for me, as I am an avid reader and wanted to build the perfect reading nook for fellow book lovers.”

Did you preserve any barn-like elements within the house?

 “The original property owner built the barn back in the 1970s. It was inspired by the Scandinavian architecture that we see a lot of in the Seattle area, as there is a sizable Norwegian and Swedish community. I wanted to preserve as much of the original A-frame design and sloped roof as I could when turning it into the cabin, and I was even able to reuse a lot of the original wood, some of which was milled on the property years ago.”

 “The cabin went live on Airbnb in April. We haven’t even hit our busy season yet, but we’re getting more bookings than expected during Seattle’s slower/wetter months, and it’s been profitable at about $2,000 a month, a 3x margin over my HELOC payments. I think this is due to the experience the property offers. It’s about an hour outside Seattle and is close to a beautiful and well-known national park, so this can be a little weekend getaway for couples or families. I also built a firepit, so guests can have a relaxing evening with friends or use it for a s’mores night by the fire with kids.”

What advice do you have for others who might like to try renovating or owning a short-term rental?

 “Pull more from your HELOC than you think you’ll need. My budget was $60K, and I ended up going slightly over, but that wasn’t an issue because I was totally covered with the funds from my HELOC. It was a lot of hard work, and it took me about a year, but I’m very proud of what I accomplished. It has also inspired me to take on more home renovation projects.”

Why do you think barn conversions and barndominiums are so hot right now? 

“I love barndominiums, too! Although I don’t consider this cabin a barndominium because of the size and the slope of the roof. Hall of Moss is under 600 square feet, and having an accurate listing is something that guests can rate against a listing on Airbnb. I think the barndominium style and A-frame are so popular because they are unique stays, offering a different escape than city zoning laws restrict. It’s also popular for builders because you don’t have as many legal restrictions with this home-building style. In general, I think we’re seeing a huge movement of people trying to curate homes that speak to their passions and their idealized version of self. When our homes closely reflect that, we feel more joy compared to sterilized high-rises or builder-grade homes. I believe that’s why my cabin has been so popular in the first few weeks—it’s a true immersion in a romanticized style of living that breaks the mundane cycle we may have in our day-to-day lives.”

See more photos of Bailey’s renovation below.

How to turn a barn into an Airbnb

How one investor renovated a humble farm shed into a cash cow inspired by watching HGTV.

“I turned a tiny barn into a blockbuster Airbnb”

Retired grandmother (and Playbook reader) Dona Ashby runs a family flipping business with her daughter, buying foreclosures in Indiana and selling them for big profits. But she made one recent purchase without getting a look inside the house. How bad could it be? Find out below.

How’d you get into investing in real estate?

 “In 2019, I retired and moved to Indiana to be near my daughter Randi and her family. Once she moved to a bigger house, I helped her sell her old one in a ‘for sale by owner’ to save on commission costs. Many years ago, I was a Realtor, so I knew how to present and sell a house. I went over and painted the rooms a neutral color, caulked, touched up baseboards, and added molding. I found that I enjoyed doing those things, or calling my son-in-law Aaron to come and do them. It was calming for me. Then we put it up for sale, and we actually made over $100,000 on it. That got me hooked. I thought, “What a fun way to make money!”

How’d you end up flipping foreclosures with your daughter? 

“Randi became my Realtor. She has a demanding full-time job, but she agreed to get her real estate license to help me out, and I sure appreciate her! It’s a great system because she charges me 1% commission, and it’s an activity we share that strengthens our mother/daughter bond. We check for sheriff sale properties weekly, which is the Indiana foreclosure process. Randi will run comparables on any property we see that looks good on paper to see what the difference is between the market value and the judgment amount the bank requires. If there’s a good spread, we will do a drive-by. If the house appears vacant, I will generally find a way to get inside and have a peek around. It’s not above me to climb through a window to get inside. Randi once climbed through a window and fell on a dead bird. I sure laughed my head off at her screaming, once I knew she was okay!”

How’d you end up with this nightmare foreclosure?

 “In December 2023, I purchased a house in Newburgh, IN, for $136,000. Since the house had not been abandoned, I couldn’t go inside the house to check it out before purchasing it. We couldn’t get on the property to even see in the windows. So I had to buy it sight unseen, and was it scary!”

 “The people still lived there amidst the worst cockroach infestation I’ve ever encountered. They were so bad, you could actually smell the roach poop. When you entered, they dropped onto you from the ceiling. Randi has a big problem with insects, so the first time one got in her hair, she ran screaming from the house. There were actually cockroaches between the wallpaper and the wall. The tenants had moved out by the sale, so most of the furniture was gone, and a lot of roaches went with them. But three dumpsters worth of stuff were left.”

Gross! How’d you get rid of the roaches?

 “We contacted several pest removal companies; one wanted to cover the whole house in a tent and fumigate it. We opted for a normal method of coming in and spraying, and treating the house multiple times. He ended up coming back three times to re-treat before I no longer saw any live cockroaches. But the dead ones! Oh my gosh. There were thousands of them everywhere. I vacuumed dead roaches from the fireplace, from inside the vents, and anywhere else you can think of. I didn’t think we’d ever lose that smell, and we had to remove all the cabinets because the roaches had nested in them for so long there was no way to remove the dead eggs—which are extremely tiny by the way, but if you have thousands of them, are very easy to see. It was a total gut job. It took us eight months to get it to market: new roof, new water heater, new kitchen, appliances, toilets, floors, paint, carpet, and waterproofing for the basement. I hired out the roofing and flooring. My son-in-law Aaron put together and installed the kitchen cabinets, toilets, water heater, and numerous other repairs.”

 “Randi closed on the home in September 2024 for $234,900. We cleared $42,500 after expenses. But I hope to never buy another one without getting inside to look at it. Sometimes, doing this, you’ll get a stinker, and this one was mine.”

What lessons have you learned flipping foreclosures?

 “You can’t count your chickens until those eggs have hatched. One of my first lessons was on bidding at the sale. You’re in a room with seasoned investors who have crews at their disposal and who make their livelihood from this work. And here I am, a grandmother just playing around. When the property comes up, the bank bids first—that’s the judgment amount. If you’ve done your homework, determining what the market value is after renovations and how much the reno is going to cost you, you can confidently bid how much you’re willing to pay for it. At my first sale, I had investigated a property, climbed through a window to look around inside, and knew I wanted to buy it. But one of the other investors outbid me, and he got it because I wasn’t confident in exactly what it would cost to fix it up. That has happened to me a few times, being outbid because I was too scared. Now I’m much more confident in my ability to buy, fix, and sell a home.”

Any advice for others who want to follow in your footsteps?

 “My advice to anyone who wants to try this process is to have a bankroll. It takes money to make money. Foreclosure sales are all in cash, no financing allowed. So you’ve got to have the cash to purchase a home. You can use credit cards to purchase the materials, but you need cash to pay any subcontractors, like the roofing or flooring guys, and if you run into big problems, you’ll have to pay a plumber or electrician. If you don’t have a lot of cash yourself, make sure you have a source to borrow large sums, and you’ll have to factor in the interest you pay on borrowing that money. I was retired from a good career with access to my 401(k) money. Now I have a couple of rentals that provide me with cash flow to pay for supplies on the next flip.”

How to flip a foreclosure

This mother-and-daughter team renovates run-down properties, but one project turned out to be much more than they bargained for.

“I flipped a foreclosure hiding a horrible surprise inside.”

Not feeling so great about the state of real estate? Join the club.

 for the second straight quarter to its lowest level on record, according to the RCN Capital/CJ Patrick Company Investor Sentiment Index, which tracks how real estate investors across the country feel about the housing market. The Q1 2025 optimism score of 88 is down 36 points from last fall’s peak of 124.

More than one-third of survey respondents believe conditions are worse today than a year ago—a significant increase from last quarter’s one in four. Investors’ biggest beefs are spiraling costs (60%), supply chain disruptions (47%), and thinner profit margins on flips and rentals (40%).

“Investor sentiment is trending along the same lines as homebuilder sentiment and consumer sentiment, which recently recorded their second-lowest score in over 50 years,” noted RCN Capital CEO Jeffrey Tesch. “Our survey results suggest that enthusiasm among both rental property and fix-and-flip investors is being challenged by economic uncertainty, rising home prices and insurance prices, and high finance costs.”

Despite the bleak outlook, it’s not all bad news: Although 35% of flippers and 28% of landlords plan to buy fewer properties this year than they did last, many are simply adjusting their investment strategy to use the adversity as an opportunity. Here’s a sneak peek at their new plans.

“I am hoping to buy more properties this year but am moving away from fix-and-flips and focusing more on long-term rental properties,” says 

, who has renovated more than 250 homes in Virginia over the last decade.

The reason: “I’ve had 10 properties sitting on the market for 50-plus days with lower showing activity than in years past. I put these same properties up for rent and received over 20 applications in a week, and I rented them all above asking price. There’s a huge pool of qualified applicants looking at rentals; maybe fear of a downturn is keeping them from wanting to be homeowners. I have noticed a major uptick in sellers wanting to offload their properties, whereas in the last few years, sellers acted like they were sitting on gold with their homes.”

“I flipped a lot of houses in Pennsylvania in 2023, and this strategy worked well for a while, but as interest rates began to rise, the cash conversion cycle started to slow down,” says Austin Glanzer of 

“As a result, I’ve pivoted over the past year toward wholesaling and listing more houses. While I may be giving up the potential for higher profits on each deal, I’m able to generate cash much faster.”

“For 2025, I’m shifting toward creative financing like subject-to and seller-financing deals,” says Mike Wall, from Dayton, OH–based 

. “These allow me to acquire properties with built-in equity or below-market rates without relying heavily on traditional funding sources that are increasingly expensive. I’m also targeting distressed sellers and leaning into buy-and-hold rentals in undervalued Midwest markets, where affordability still exists and rents remain strong. So while I may do fewer flips, I’ll be doing smarter deals—ones with cash flow from day one and that hedge against the volatility we’re seeing in capital markets.”

“I’ve noticed 2025 feels less like a slowdown and more like a sorting mechanism: The economic climate is forcing out the speculative players and giving room to those of us who think long-term,” says investor Ali Zane at 

“I’m treating tenant screening like a financial portfolio. Economic volatility means that renters with strong payment histories and stable employment are an asset in themselves. The way I see it, real estate in 2025 is less about scaling fast and more about building quietly, using leverage wisely, and staying liquid enough to pounce when the math works.”

“This year, we’re not seeing investors pull back entirely, but we are seeing a real change to how and where they buy,” says Troy Evans, director of Investor Services at 

. “In certain markets, especially ones that had large population swings in the last few years, flipping has begun to slow down. Higher overall costs are causing investors to look into build-to-rent or long-term rental paths that may offer a bit more stable income. In the past, we saw many investors chase volume. In 2025, investors are being much more selective and targeting markets with strong fundamentals and year-over-year rent growth.”

“As a property investor and flipper in the Northeast, my plans are still to acquire, hold, and flip,” says Ralph DiBugnara, president of 

. “Higher home prices, property taxes, and insurance, as well as high interest rates, make it very hard to turn a profit with income from rent. But I believe when mortgage rates do come down, home prices will rise significantly due to increased demand and affordability. That is the reason I’m still very interested in buying: A house bought today will be worth more over the next few years and will prove to be a worthwhile investment.”

“Higher interest rates and uncertainty have cooled the market, but fewer buyers and sellers often create the very conditions that favor investors who are ready and well-informed,” says Dani Beit-Or, CEO of 

, who has been involved in more than 5,000 real estate transactions in over 40 US markets. “The best opportunities in 2025 won’t come gift-wrapped. They’ll require diligence, negotiation, and a clear investment plan. I’m being more selective, prioritizing strong markets with stable job growth, and leaning on creative funding options like self-directed IRAs. If history has taught us anything, it’s that the moments of greatest uncertainty often create the best long-term gains for those who act strategically.”

Real estate investor confidence drops to record low

House flippers, landlords, and other investors are feeling queasy—and have altered their game plans for 2025.

 in Diamond Bar, CA, often tackle the unappetizing task of purging houses packed with, well … everything. Hoarder homes may be bargains, but what does it really take to wipe a slate like that clean? Casey recounts one of their most challenging recent projects, which he nicknamed the High Desert Hoarder House, and all the teachable moments within.

How’d you end up with this eyesore of a property?

 “The owner of the property found me online and reached out for a cash offer. Her property was infested by rats, she had just gotten divorced, and she was in the process of moving from California to Arizona for a fresh start. She knew that she didn’t have the time, money, or bandwidth to clean up, fix, and list the property. My wife was actually really excited about the project, so we bought it for $285,000, and the seller was on her way.”

 “There were hundreds of roaches. But the biggest freakout moment was 100% the rats. It wasn’t just that the house had rats, but that there were tons of them, and they were aggressive. Typically, rats will scurry away and let you be, but not these. Rats from this house must have been possessed or drank some bad water because they would run at you in packs. I used to say that real estate 

 goes as planned, but now I just say that real estate 

 goes as planned. Thankfully, my wife doesn’t visit projects until they are cleared out.”

What did it take to clear out and renovate?

 “I called my clean-out guy. He and his guys wore jeans and heavy sweatshirts to be sure that there wasn’t any exposed skin. Once all the items were cleared out in three huge dumpsters, the rats were gone, but they had already chewed through everything. They had even chewed into the walls, leaving us needing to replace all electrical wiring and insulation. So we removed and replaced the insulation in the walls and attic, plus completely overhauled the home’s major systems. We remodeled it for $62,000, then sold it in 2024 for $442,000. Total profit after closing costs and commissions was $76,000.”

 “If the house is packed and the contents are in good shape, then I will save and donate. My process is to call my estate sale friends and have them perform a sale at the property, or if we are short on time, remove the contents so that they can do a sale off-site. This can really turn into a big win-win because if there is some value there, I basically get paid to have contents removed that I would normally pay someone to remove. I did find a wedding ring once under a dresser and returned it to the family. That said, there are times when the contents of the home are not salvageable due to water damage, fire damage, or the crowd favorite: rodents.”

Any advice on clearing out a hoarder house?

 “With hoarder houses, my advice is to expect the worst and err on the side of caution. Also, increase your ‘oh shit’ buffer. I budget 10% of the project budget for unexpected items, but with hoarder houses, you really need 15%–20%. My due diligence involves walking it with my contractor; if the HVAC system is older than 15 years, then I have that inspected. If their property is on septic, then I have a septic inspection done. Also, due to the weight of the contents in a hoarder home, if it’s older, I will have a foundation inspection done as well.”

What have you learned clearing out hoarder houses?

 “My biggest lesson is if it doesn’t look and feel like a ‘heck yes,’ it needs to be a ‘heck no.’ Every time I had to convince myself to buy a deal, I ended up regretting my decision. Second lesson: Walk before you run—meaning don’t go out and buy a huge fixer on your very first deal. Start with a paint and floor cleanup first, and after each time, progress into bigger jobs once you’ve mastered the basics, have a good crew in place, and feel ready for a big job.”

How to fix a hoarder house

The dirty truth about what it takes to clear mountains of clutter—and what you’ll find inside.

“My wife and I turned a hoarder house into a beautiful home.”

Many people dream of investing in real estate, of rolling up their sleeves to flip a fixer-upper or opening an adorable Airbnb, but aren’t sure if they have what it takes to pull it off, financially and otherwise. Though it’s true that some real estate investments demand deep pockets or serious elbow grease, many other opportunities can be pursued just fine with minimal cash, time, and expertise up front. Here’s a rundown of the most common strategies, as well as the benefits and challenges of each, so you can find the best fit.

REITs are companies that own income-producing real estate, such as rental homes, offices, and shopping malls. They’re one of the easiest ways to invest in real estate: You simply buy REIT shares, which are typically sold on exchanges similar to stocks.

Congress created REITs in 1960 to make real estate investing accessible to all Americans. Today, about 

 across the country are owned by REITs holding over $4 trillion in assets. REITs are legally required to distribute at least 90% of their taxable income to shareholders. Historically, REITs have posted annualized returns of 

 from May 1972 to the end of 2019—a tad higher than the S&P 500’s 10.6% average annual return over that same period.

REITs are not risk-free. Dividends and share prices fluctuate based on market conditions, so there’s no guarantee you’ll rake in reliable returns. Still, they’re a low-maintenance option if you’re seeking passive income without the pressure of owning actual property, as well as an easy way to get your foot in the real estate investment door. Learn more about 

REIGs are private collectives of investors who pool resources to purchase income-generating properties. Although similar to REITs, REIGs don’t have the same regulatory requirements (e.g., the 90% income distribution rule) and aren’t typically traded on stock exchanges. You’ll find REIGs via 

 like those hosted by the National Real Estate Investors Association.

Investing in REIGs usually requires $5,000 to $50,000 up front, and funds may be locked in for a set period, limiting liquidity. Average returns ranged 

. Although REIGs require a bit more capital and commitment than REITs, they can be worth it for investors seeking access to exclusive investments that could boast higher returns. Here’s more on 

In 2012, the Jumpstart Our Business Startups (JOBS) Act was passed, allowing small businesses to solicit funding from the public via 

. Since then, sites like Fundrise, CrowdStreet, and RealtyMogul have popped up to offer anyone with a wi-fi connection the ability to invest in real estate projects big and small. Although some require an initial outlay in the thousands, others cost as little as 10 bucks. Returns reportedly range from 

Keep in mind that some sites charge fees or require a minimum balance. Liquidity can also be an issue, as some investments lock up funds for years. So make sure to research your platform and projects with care before you commit.

Got an empty bedroom, carless garage, or other area in your home that’s not getting much use? Rent it out, and you’ve joined the leagues who “house hack.” House hacking (a term popularized by Brandon Turner of the real estate investment education site BiggerPockets) brings in income without requiring a whole separate residence. It’s particularly popular in pricey housing markets where you might struggle to pay your mortgage without a roommate or renter pitching in.

Of course, if you prefer your privacy, having a tenant this close by could wear on you, but there are plenty of arrangements that can keep awkward bump-ins to a minimum. Duplexes, guest houses, and basements or garages converted to apartments all offer the possibility of separate entrances, bathrooms, and kitchens.

If you love finding dirt-cheap properties but are leery of committing to fixing them up yourself, wholesaling may be a great middle ground. This is where you find distressed real estate, secure its purchase for a low price, then find someone else who’s willing to pay you more than you put up. You’re essentially a matchmaker, pairing motivated sellers with interested investors. Since wholesalers typically assign their contract to another buyer rather than taking ownership, it’s low-risk and doesn’t require much money beyond an earnest deposit of as little as 

However, success in wholesaling requires strong negotiation skills, a broad network of buyers, and a deep understanding of local markets. Some states also require wholesalers to hold a real estate license. Last but not least, finding these diamonds in the rough does take time and a lot of legwork, but it’s the perfect pursuit if you love the rush (and payoff) of buying low to sell high. Here’s a 

Bird dogs are similar to wholesalers in that they flush out cheap real estate that owners are eager to unload. The difference is that they take on even 

 responsibility and simply sell their leads to wholesalers, house flippers, and others who will shoulder the negotiations and contracts.

 of around $250 plus a small percentage of the profits. It’s not much, but if you love the thrill of the hunt but hate paperwork, this is a low-key way to dabble and get your real estate investment feet wet.

Although “landlord” may have an Old World ring to it, this profession is still the most tried-and-true real estate investment out there today. In fact, 

 is owned by individuals who earn an average of $10,000 per property per year.

The downside, of course, is that being a landlord isn’t as simple as buying a place and watching the rental checks roll in. If a pipe bursts or a roach infestation arrives, you’re on the hook for repairs and maintenance. Landlords spend an average of 

 managing each rental property they own, although this work can be outsourced to a management company. Another potential issue is if your tenant stops paying rent, some states have strict tenant protection laws, making eviction difficult. Still, as long as landlords budget for the unexpected, it’s a time-tested way to build long-term wealth. Check out this 

Whether you own a cabin in the woods, beach house, tree house, hobbit house, windmill, or yurt, you can rent it out through sites like Airbnb and VRBO. Today, there are 

 short-term rentals available in the US run by over 785,000 hosts who make an average of 

Still, whether you aspire to Superhost status or not, being in the hospitality biz means that much like a hotel concierge, you’re on call 24/7 for any questions and issues, from glitchy wi-fi to noise complaints from neighbors. Plus, many popular tourist destinations are clamping down with regulations and caps on the number of short-term rentals allowed in any area, so make sure to fully understand the legal landscape before diving in with this 

If you’ve got an arsenal of tools and know how to wield them, house flipping is the ultimate hands-on investment where you buy a fixer-upper, roll up your sleeves to restore it to its former glory, then make a killing when you sell. House flippers profit an average of 

 and spend an average of 166 days to work their magic.

Though house flipping can be rewarding, brace for some back-breaking work. You’ll also need plenty of capital and a solid understanding of property valuation and renovation costs. If you’re new to flipping, start small and look for homes that need just cosmetic upgrades, such as kitchen cabinets and a fresh coat of paint rather than a new foundation and roof.

Although this isn’t technically an “investment property” since its primary purpose is to provide a roof over your head, it is most certainly an investment—probably the biggest one many of us will ever make.

Homes also act as a “forced saving plan,” meaning since you’re on the hook to pay your mortgage every month, you aren’t likely to squander that money on frivolous purchases. And as your equity builds over time, another benefit is that you can leverage this asset to purchase a second property.

So even if all you do in the property investment game is buy a home to call your own, you’re on the right track.

Collage of houses for sale and homebuyers