For many people, buying a home just wasn’t in the cards this year. There were too few homes for sale that were too expensive to buy.

Indeed, home prices have been on a tear, with third quarter home prices up more than 18% from a year earlier, according to the Federal Housing Financing Agency. And some analysts expect they will continue to rise significantly through 2022.

But those who got shut out of buying a home don’t have to miss out on rapidly appreciating real estate values.

Investing in real estate has long been the realm of “accredited investors,” a category of typically high-net worth investors with access to high-risk (and potentially high-reward) investments like private equity real estate funds, hard money loans or real estate syndication in which a group of select investors pool their money to buy properties. But through investment products like mutual funds and ETFs tied to real estate and online crowdfunding platforms, more people are able to access real estate investments.

“There are a lot of people who are feeling excluded from the home market right now,” said Ben Miller, co-founder and CEO of Fundrise, an online real estate investment platform. “Investing in real estate is a way for them to start to understand real estate.”

While other alternative investments like cryptocurrency can fluctuate wildly from day-to-day, real estate can be a reliable long-term growth investment and income generator, he added.

Here are some of the ways you can invest in real estate without buying a home or becoming a landlord.

Investing in REITs

Real estate investment trusts own and invest in properties. By putting money into a REIT, investors are given the opportunity to buy shares in commercial real estate portfolios and earn money from income-producing properties without actually buying or managing the property.

Pulblicly traded REITs are available to investors directly or through mutual funds and ETFs. Some popular ones are Vanguard Real Estate ETF (VNQ (VNQ)) or iShares U.S. Real Estate ETF (IYR) (IYR).

Given the massive increase in home prices, REITs had a banner year in 2021, with investor earnings hitting a record high. The cash flow from the investments for equity REITs were up 40% in the third quarter from a year ago to a record high $17.4 billion, according to an index from Nareit, a REIT industry group.

And there’s still room to run in the real estate market, said Jim Sullivan, BTIG’s REIT analyst.

“We continue to see positive signs for the economic recovery headed into 2022,” he said.

Crowdfunding

It used to be that investors needed tens of thousands of dollars to invest in real estate, but minimums have decreased dramatically. Crowdfunding companies, which pool smaller amounts of money from a large group of investors to put toward properties, have been able to get initial investment minimums down to hundreds of dollars. There are even options to invest with just tens of dollars.

Fundrise, for example, offers an option that requires a minimum investment of $10. At that level, the investment is entirely in a Flagship Fund, which contains real estate properties around the country ranging from single family rentals to logistics centers. The company charges an annual advisory fee of 0.15%, with its funds charging an additional annual asset management fee of 0.85%.

“Once you invest you can see that you invested in a real asset,” said Miller. “There is a real value, not just market value or cryptocurrency speculation. A lot of people never thought they could own real estate.”

Another way to invest through crowdfunding is in real estate debt.

For a minimum investment of $5,000, RealtyMogul offers funds focused on growth or on generating income from commercial real estate debt, as well as equity in apartment rentals and other residential properties. Fees include an annualized service fee of .5% and an annualized asset management fee of 1% based on the REIT’s total equity value.

Another company, Yieldstreet, offers an alternative investment fund, the Prism Fund, with access to investments previously only available to institutional investors. The fund is comprised of real estate debt and equity, as well as debt from the art, maritime and legal industries, among others. The goal is to generate returns that can be paid out quarterly as cash or reinvested. The minimum investment is $500 and the fund charges an annual fee of 0.5% and a management fee of 1%.

Crowdfunding sites offer up a way to get decent returns from the real estate market, though probably not as much as buying property directly, said Blaine Thiederman, certified financial planner and founder of Progress Wealth Management.

“Is it going to provide you the same returns that you might be able to receive if you were to go out and invest in your own real estate? Unlikely, ” said Thiederman. “However, I’ve seen stock-market-like returns through each of these platforms and occasionally better returns.”

While their simplicity and favorable income streams from crowdfunding sites are attractive, he said, investors need to be aware of fees and the period of time you have to wait to get your initial investment back.

Should you invest?

Since real estate tends to both increase in value and generate income, it’s a good way to diversify your portfolio, said Marcus Blanchard, a certified financial planner and founder of Focal Point Financial Planning.

“Stocks typically have most of their return from the price appreciation and bonds typically provide most of their return through the interest payments investors receive,” he said. “But real estate is right in the middle, where returns come more evenly between price appreciation and steady income.”

But there are some risks, including the volatility of the real estate market and the quality of the property, said Blanchard. The larger REITs typically have access to higher quality investments because of their scale. Meanwhile, smaller crowdfunding firms do their due diligence but still might be investing in lower quality properties, he said.

Most advisers recommend putting only a small portion of your overall investments in real estate.

“I typically don’t recommend anyone invest more than 10% of their portfolio in real estate whether it be through a REIT, an investment through an online platform like Fundrise, or in rental properties because there’s just so much risk,” said Thiederman. “Investment strategies need to be profitable, because who knows what will happen throughout the rest of our lives, but that doesn’t mean we should be investing in speculative apartment complex developments with 50% of our retirement accounts.”