Tiny 384-square-foot Silicon Valley home sold for a staggering $2 million — here are 3 alternative ways to invest in real estate without taking on an expensive mortgage

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A million-dollar home often conjures images of a mansion, but in Silicon Valley, things can be a bit different.

At 10036 Carmen Road in Cupertino, California, sits a one-bedroom, one-bathroom home with 384 square feet of living space. The tiny home went viral in April due to its $1.7 million listing price. But despite the sky-high price tag, listing sites show the home has sold for considerably more at $2 million.

The tiny house received an “insane amount of attention,” listing agent Faviola Perez told SF Gate. But she insists the key to the property's value is in its land.

The description on Zillow highlighted the property's location as being in a top-tier school district, its 7,841-square-foot lot surrounded by $4 million to $5 million homes and its close proximity to major commuting routes, underscoring the land's significant investment potential.

This story showcases the soaring values in certain real estate markets, but it’s important to remember that investing in real estate doesn’t always require buying a house. Here’s a look at three alternative strategies that don't involve hefty upfront investments.

Invest using a crowdfunding platform

Crowdfunding has become a buzzword in recent years. It refers to the practice of funding a project by raising small amounts of money from a large number of people.

These days, many crowdfunding investing platforms allow you to own a percentage of physical real estate — from rental properties and commercial buildings to parcels of land.

Because of the greater risks involved in real estate crowdfunding, some platforms — like First National Realty Partners(FNRP) — are targeted for accredited investors.

At a minimum investment amount of $50,000, FNRP allows accredited investors to get their hands on necessity-based commercial real estate without having to do the legwork of finding deals on their own.

FNRP’s team of experts have developed relationships with the nation’s largest essential-needs brands, including Kroger, Walmart and Whole Foods and they will act as the deal leader through their entire life cycle while you passively collect distribution income.

If you’re not an accredited investor, certain platforms may let you invest small sums, so you can still enjoy the convenience of crowdfunding and the promising returns of real estate, and Arrived is one of those platforms.

Backed by world-class investors like Jeff Bezos, Arrived allows you to invest in shares of rental homes and vacation rentals without having to deal with all the work and risk that can come from having tenants.

You can start by browsing a curated selection of homes, vetted for their appreciation and income potential.

Once you find a property you like, choose the number of shares you want to buy and get started with as little as $100.

Private REITs

Real estate investment trusts, or REITs, are companies that own income-producing real estate like apartment buildings, shopping centers and office towers.

REITs are publicly traded companies that own income-producing real estate like apartment buildings, shopping centers and office towers. They collect rent from tenants and pass that rent to shareholders in the form of regular dividend payments.

However, Fundrise is a private market firm that makes investing in real estate easily accessible with their exclusive eREITs and an approachable minimum investment.

Fundrise's eREITs, available exclusively on their platform, are designed to help you seize private real estate consistent income-generating potential.

Each eREIT is part of an investment strategy that can include a range of assets, including residential and commercial properties or real estate loans, ensuring diversification within your portfolio.

To start investing with Fundrise, all you have to do is sign up and answer a few questions about yourself and your investing preferences. From there, Fundrise will suggest a portfolio best suited to your goals and risk tolerance.

Invest in ETFs

Picking the right REIT or crowdfunded deal requires plenty of due diligence on your part. If you’re looking for an easier, more diversified way to invest in real estate, consider exchange-traded funds.

You can think of an ETF as a portfolio of stocks. And as the name suggests, ETFs trade on major exchanges, making them convenient to buy and sell.

When you open a brokerage account with E*Trade, you can use ETFs to gain access to a diversified portfolio and won’t need to worry about which stocks to buy and sell.

E*Trade is an investment platform from financial giant Morgan Stanley. Through their brokerage account, you can invest in ETFs and enjoy $0 commissions on online US-listed ETF trades. Opening an account takes just 10 minutes — you’ll gain access to timely research and analysis to support your investing choices.

Plus, if you open and fund a new brokerage account by July 31 using the code REWARD24 you can get up to $1,000 credited to your brokerage account.

If being an active trader isn’t for you, then consider an automated portfolio through Wealthfront.

Wealthfront is an investing and financial services company that can help you grow your money in a way that aligns with your appetite for risk and investing goals.

By answering a few questions, Wealthfront can help you determine the optimal asset allocation by crafting a diversified portfolio spanning a range of assets — from stocks, ETFs and bonds to real estate.

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.