Buying and owning real estate is an investment strategy that can be both satisfying and attractive. Prospective real estate owners, unlike stock and bond investors, can use leverage to buy a property by paying a portion of the total cost, then paying the balance over time, plus interest.

While a traditional mortgage usually requires a 20% to 25% down payment, in some cases a 5% down payment is all it takes to buy an entire property. This ability to control assets is signed on-the-moment papers, which give both real estate flippers and landlords who can take out a second mortgage on their homes to pay on additional properties.

Here are several ways investors can invest in real estate.

1. Be a Landlord

What it takes to start: Original capital needed to meet up-front maintenance costs and cover the empty months.

Pros: In addition, many associated expenses are tax-deductible, and any loss can offset gains in other investments. 

Cons: Rental properties continue to suffer from constant headaches until you get a property management company. In the worst case, nuisance tenants can damage the property. 

2. Real Estate Investment Group (REIG)

What it takes to get started: a capital flow and access to financing.

Pros: This is a much more ways approach to real estate that still provides income and appreciation.

Cons: There is a vacancy risk with Real Estate Investment Groups (REIGS), whether it extends to the entire group, or whether it is specific.

3. House Flipping 

What it takes to get started: Capital and the ability to repair or oversee as needed.

Pros: There is a short period of flipping, during which capital and effort are tied into an asset. 

Cons: Real estate trading requires in-depth market knowledge paired with luck. 

4. Real Estate Investment Trust (REIT)

What it takes to start: Investment capital.

Pros: REITs are essentially dividend-paying stocks whose core holdings include commercial real estate with long-term, cash-producing leases.2.

Cons: REITs are essentially stocks, so leverage associated with traditional rental real estate does not apply.