4 Great Ways to Make Money in Real Estate
So, you want to make money in real estate? Great, it’s going to be the best decision you’d ever make as real estate industry still presents the most efficient way to create sustainable wealth. However, a little people know about the industry is that there are many other ways to make money in real estate apart from property flipping or working as a traditional real estate agent to help people to buy and sell homes.
The real estate marketplace has a lot to offer to the investors. And the best way to make the most out of your investments is to have an insight into the industry.
A great real estate investment ensures a great return on your investments without much effort. The different ways of making money in real estate have different levels of risk, return and time commitment. Some may be more of a full-time job while some take almost no work.
So, let’s dig deep into the topic to make money in real estate.
1. Long-Term Rental Income
The most renowned and probably the best suitable option for the newcomers are to earn rental income. It can take a lot of upfront cash, but the returns are incredible if you buy right and are patient.
If I made a right decision, there are chances of earning over 15 percent cash on cash returns on long-term rental properties, which is a great start I guess. If you consider tax benefits, the return on investment may go more than 15 percent on long-term rental properties.
When investing in real estate with long-term rentals, it is important to focus on cash flow. And the best way to do it is by buying properties at below market value and choosing homes that will give high rent to purchase price ratios.
2. Short-Term Rental Income
The best thing about short-term rental properties is that you earn regular income from the rental and can easily sell the property for a profit. Just like the long-term rental properties, the income may depend upon the location of the property and its accessibility to the city.
Talk to the real estate agents to know about best rental property options in the city to get your hands on the best one to make money in real estate. Another benefit is that you are not living under the fear of your property being occupied by the stubborn tenants who would not want to leave your property. Remember to prepare a rent agreement with every tenant you are going to rent out your home so you stay secure.
3. Real Estate Investment Trusts (REITs)
You know about the stocks and mutual funds, right? Similar are the REITs or Real Estate Investment Trusts. They can be purchased by anyone and good results can be enjoyed. REITs will invest in large commercial projects, industrial buildings, land or even government buildings.
What makes the REITs the best option to get into the market is the ease of management. Anyone can manage them with a little knowledge about the market, but they can also go up and down like the stock market, so you have to be informed about when to purchase and when to sell. I prefer to invest in real estate with a more hands on approach. The only difference here is that you can’t buy a REIT below market value like you can a house.
4. Vacation Rentals
It may be limited to particular areas, cities or countries. If you can afford to purchase a property in a great tourist location, then using the property as vacation rental may be a great choice. The problem here is that the income is not always stable. While the peak season can bring top dollar, returns may be significantly lower during the off season because demand goes down. The best tip to make money in real estate as investment rentals are to keep the price low enough that the unit stays rented.
You also need to keep in mind the expenses for property management, maintenance cost, state taxes, etc., which cut your revenue to a great extent sometimes.
Source: https://www.investmentrealestate.biz/blog/4-great-ways-to-make-money-in-real-estate/
The real estate marketplace has a lot to offer to the investors. And the best way to make the most out of your investments is to have an insight into the industry.
A great real estate investment ensures a great return on your investments without much effort. The different ways of making money in real estate have different levels of risk, return and time commitment. Some may be more of a full-time job while some take almost no work.
So, let’s dig deep into the topic to make money in real estate.
1. Long-Term Rental Income
The most renowned and probably the best suitable option for the newcomers are to earn rental income. It can take a lot of upfront cash, but the returns are incredible if you buy right and are patient.
If I made a right decision, there are chances of earning over 15 percent cash on cash returns on long-term rental properties, which is a great start I guess. If you consider tax benefits, the return on investment may go more than 15 percent on long-term rental properties.
When investing in real estate with long-term rentals, it is important to focus on cash flow. And the best way to do it is by buying properties at below market value and choosing homes that will give high rent to purchase price ratios.
2. Short-Term Rental Income
The best thing about short-term rental properties is that you earn regular income from the rental and can easily sell the property for a profit. Just like the long-term rental properties, the income may depend upon the location of the property and its accessibility to the city.
Talk to the real estate agents to know about best rental property options in the city to get your hands on the best one to make money in real estate. Another benefit is that you are not living under the fear of your property being occupied by the stubborn tenants who would not want to leave your property. Remember to prepare a rent agreement with every tenant you are going to rent out your home so you stay secure.
3. Real Estate Investment Trusts (REITs)
You know about the stocks and mutual funds, right? Similar are the REITs or Real Estate Investment Trusts. They can be purchased by anyone and good results can be enjoyed. REITs will invest in large commercial projects, industrial buildings, land or even government buildings.
What makes the REITs the best option to get into the market is the ease of management. Anyone can manage them with a little knowledge about the market, but they can also go up and down like the stock market, so you have to be informed about when to purchase and when to sell. I prefer to invest in real estate with a more hands on approach. The only difference here is that you can’t buy a REIT below market value like you can a house.
4. Vacation Rentals
It may be limited to particular areas, cities or countries. If you can afford to purchase a property in a great tourist location, then using the property as vacation rental may be a great choice. The problem here is that the income is not always stable. While the peak season can bring top dollar, returns may be significantly lower during the off season because demand goes down. The best tip to make money in real estate as investment rentals are to keep the price low enough that the unit stays rented.
You also need to keep in mind the expenses for property management, maintenance cost, state taxes, etc., which cut your revenue to a great extent sometimes.
Source: https://www.investmentrealestate.biz/blog/4-great-ways-to-make-money-in-real-estate/
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