Recently, I’ve seen someone ask how to start real estate investing with 1,000 yuan. This is actually a pretty good question. Buying a property outright to rent it out sounds appealing, but in reality, it can be a trap—finding tenants, managing the property, and handling repairs. An empty period or a major renovation can turn your income into a loss. I think many people overlook a smarter approach: getting exposure to real estate investing trusts, or REITs.

First, let’s talk about why buying a property directly isn’t cost-effective. A single-family rental home may look easy to manage, but the down payment and transfer fees for the initial investment are really intimidating. Plus, the income is unstable—once a vacancy period hits, you don’t have any income. But if you invest in a REIT like Invitation Homes, which holds more than 80,000 homes and is spread across 16 markets, you can benefit from geographic diversification. This company mainly focuses on the Sun Belt region of the U.S., where population growth is fast, there are plenty of job opportunities, and rental demand stays stable. The dividend yield is around 3%, so investing 1,000 yuan for a year can generate about 30 yuan in dividends. Most importantly, the dividends are fixed and grow year by year, unlike direct rentals that can swing wildly.

If you want to get involved in investing in apartment buildings, it’s even more complicated. Buying a small multi-family property is costly, and it’s hard to manage. But a REIT like Mid-America Apartment Communities is different—it owns more than 100,000 apartment units, and it’s also mainly concentrated in the Sun Belt. Because market demand is strong, it’s investing in and building new communities as well, with plans to put more than 700 million dollars into adding more than 2,000 units. It’s also upgrading existing properties by adding smart home features to increase rents. The dividend yield is close to 3.8%, and it has increased dividends for 13 consecutive years. Last year, it rose by 12%. This is the passive way to invest 1,000 yuan in real estate—letting a professional team handle the management for you.

Another interesting option is Sun Communities. It doesn’t invest in conventional residential homes; instead, it invests in non-traditional properties such as manufactured home communities, RV resorts, and marinas. These assets are especially resilient in the face of risk, because moving manufactured homes is so expensive that even when the economy is down, landlords can raise rents. Demand for RV lots and marinas is also growing. The company regularly acquires new projects to expand its scale. Its dividend yield is more than 2.9%, and this year it’s also increased by nearly 6%.

To be honest, if you really want to know how to invest 1,000 yuan in real estate and don’t want to be buried under landlords’ day-to-day hassles, REITs are the answer. Compared with buying a home outright—which requires a down payment of several hundred thousand—REITs let you enter with just 1,000 yuan. It’s completely passive, and you can also enjoy stable returns brought by professional management. These three companies are all solid choices in this direction.