If you are looking for making money ideas, have you considered real estate? Here are some proven ways to make money with real estate! More millionaires have been created through real estate investing than any other profession.
The real estate business is undoubtedly one of the most lucrative ways of minting money at this moment. In fact, the amount of revenue that is generated through real estate is truly unparalleled. If you look at any real estate agent, the chances are high that they are swimming in money. Despite all this, it is not a very sought-after career option mainly because of the various risks associated with it.
What if you invest in a property and are unable to manage any buyer who will buy it at a profitable amount? This is the most common question that detracts people from entering into this business. Another common misconception is that to be a real estate agent you need a lot of capital from before which you can use for the investments. This is an absolute myth. There have been many successful agents who have literally started from scratch and have built an empire of their own over a due course of time.
You should have a good knack of business, be aware of the locations and the preferable choices of the people, have proper contacts and most importantly, can convince people not only to sell a property at a certain rate but also to make investments and buy it. If you think you have all of this, you are ready to roll and become a successful real estate agent. Some people believe that making money online is easier than investing in real estate.
This is again, not true. Both of it is equally easy and difficult, depending on your skills. Don’t have any significant capital to invest? Not a problem. Here are a few tips on how to make significant money in real estate and succeeding in it as a career option.
Fix and flip
The name means that you buy a dilapidated property, fix and renovate it, and then sell it at a higher price. The best part? If you are at the initial stage of the business, you don’t even need to make that investment to buy. Instead, you can convince someone with the capital to do the same for you and then renovate and sell it and give him his cut. This is for starters, though. A more profitable method would be to make the purchase yourself.
If you look into any neighborhood, there will always be houses and properties up for grabs. You need to decide which ones are the best investments. There is a magical rule for this- buy the ugliest properties in the best neighborhood. When people are looking to buy a new house, they give a lot of preference to their surroundings.
All you have to do is to flip the property from ugly to beautiful, and you will get buyers by the hour. The only thing that can go wrong here is the identification of the property, so take your time while doing so. Another aspect that you need to keep in mind is to determine a selling price after the flipping or renovation. It should not be exorbitantly high so that no one approaches the property, nor should it be so low that your profit margins are reduced. Talk to a contractor and an on-site tour reporter and fix a price that will suit all.
This is the best option for you if you are looking to buy and hold a residential property for a long time. To explain this strategy in simple terms, you buy a property, rent it out to people for accommodation, have a continuous cash flow and once the price of the property increases over time, sell it to an interested buyer. Sounds pretty simple, right? That is because it is. The major aspect to again look for in this aspect is the location. People like to stay in places with good surroundings, therefore, choose the residence accordingly.
There will always be someone looking for a place to stay, so you are unlikely to run out of business. Go for a tenant who is planning to stay for a long time so that you do not have to undergo the hassle of getting new people every time. Keep a check on the property listings in the area, and once you feel that you have reached the estimated amount of profit, it is time to make the jump. You should pre-inform and give enough time to your tenant to vacate the place though.
Side Note: You can read our long-term rental story about how we made $100,000 profits on our first rental property!
We have also written about a great way to buy real estate for pennies on the dollar.
Just like residential rentals, another profitable type of property that can generate positive cash flow is vacation rentals. Positive cash flow is a scenario where your income is more than your expenses, and you have a proper account of what is happening. You need to choose a property in a prime tourist location and renovate and modify it according to the general demands of the people visiting the place.
Again, if you are a beginner in the field of real estate, you can ask someone who already owns a property in these locations to give it for vacation rental, and you take care of all the arrangements. Once you throw in the profit numbers, most people will be interested in it. Enlist the property in Airbnb and other related sites and make sure that the vacation is a pleasant one for the people renting it out.
This is the best way to start your real estate career if you are not looking to invest any significant capital. Take property for lease with a buy-in clause after a certain period. In case the property price skyrockets after you lease it, you can buy it at a discounted price. If you are in immediate requirement of money, you can even sell the same rights to someone for an amount. Thus, it is a win-win position in all respects.
Sometimes, you may not be eligible for loans from a bank because of your credit scores and credentials, especially when you are at the budding stage of your real estate career. The hard money lenders can come to your rescue at this stage. They are people or organizations who are ready to hand out hard-cash to investors and charge heavier than usual interests as returns.
Only if you are confident of the potential of your property and your ability to make a sale, you engage in this strategy. However, if you are looking for that helping hand financially, this is one of the most potent ways of reaching out for it.
Many properties actually run behind on their mortgage dues and are likely to be taken over by the bank but have not reached a foreclosure yet. It is the perfect time to swoop in with the money and make a short sale and get your hands on the property. There are certain factors associated with it, though. You need to have the cash at hand to invest immediately. Sometimes, you might have to invest in a site without physically seeing it.
Most importantly, since the sale is made mostly by the bank, they tend to hold on to the property for long trying to look at more offers. So you need to be patient. Technically speaking, there are chances that you invest in a park in a hurry, and it turns out to be a dud. So be very careful with this method.
The above-mentioned methods have a certain amount of credibility attached to them because they are known to work. So, follow them and dive into the ocean of opportunities of real estate soon.
A really good resource that you should check out (if you are excited about real estate investing) is this real estate investing post by Dave Ramsey. He goes through the ideas above and also a whole lot more!
Russell and Maleah
Here are some articles about making some extra money that you can use to fund your real estate hustle!