They say that real estate is expensive, but why are there more people investing in it? The answer is simple. While it costs a great deal of money, it also provides some of the best returns. Moreover, today, investors can explore many ways to generate income with almost any type of property.
Here are a few schemes they can consider:
1. Fixing and Flipping Houses
This is the easiest way to earn money through real estate. The process is simple, and the demand for houses today is high. Of course, the profit is excellent since you can buy these properties cheaply and then sell them at market price.
However, it does involve a great deal of work and money to get started. For instance, you need to buy a house that needs some moderate renovations or minor changes. Then you will have to fix it after, which you can do yourself or hire a contractor. Finally, you will have to sell it at the right price and in a short period.
You can save yourself from a lot of guesswork by collaborating with real estate experts specializing in fix and flip. They can help you with extensive research, so you can better decide whether the distressed property is worth buying.
2. Investing In Rental Properties
This is another great way to make money from real estate. You can buy an apartment, condo, or house in a good neighborhood and rent it out for some monthly income. Of course, this is a more expensive option as you have to spend some time for research and managing the property.
But once you start making money from it, the returns will be significant. For instance, if your rental property generates a return of 10 percent a year, then over 4 years, the value of the house increases by about 40 percent. Moreover, rental homes are a safer investment since you will always have an income source.
3. Real Estate Crowdfunding
This is one of the newest ways to make money from real estate. You can now lend or invest your money in real estate projects without any requirement for large sums of capital. This way, SMEs and startups can easily find funding for commercial or residential projects. In return, they offer financial backers a small share of the profits as well as returns on their investment.
Of course, you need to do proper research before investing in real estate crowdfunding projects. Be sure about the company you are choosing and how it will secure your money from fraudsters. Also, find out more about the project before you invest.
4. Investing in Real Estate Funds
You can also make great returns from real estate funds. At present, many such funds specialize in almost every sector of the industry, including commercial and residential projects, housing finance companies, etc.
At present, it is relatively easier to find such funds because of the surge in interest for this sector. Moreover, more funds cater to small investors as well, so you don’t have to invest a lot of money or spend several hours researching on your own. You can easily make use of online tools to find the right fund for your investment needs.
5. Airbnb and Vacation Rentals
Did you know that many people make a significant amount of money from short-term rental properties? It is true, and this sector has been growing rapidly in the past few years.
For instance, a young couple bought a house for $1 million and put it on Airbnb to rent out rooms. In return, they earn $5,000 every month. So buying a property like this costs you $1 million, but it can bring in $60,000 annually without any significant alterations or renovation!
Of course, this is possible because of the surge in demand for vacation rentals. At present, over a billion people travel a year. So it has become easier for homeowners to rent out their rooms or properties on Airbnb or other short-term rental sites.
6. House Hacking
This is another innovative way to make good money from real estate. The idea involves living in your property and renting out a part of it for other people. For instance, you can rent the basement or garage to students for some extra income. It might not bring in much money every month, but over a couple of years, you could save a significant amount of cash.
7. Become an Agent or Broker
This is the traditional way to make money from real estate investments. If you have some experience in this field, you can start a brokerage company and work with investors looking for properties to buy or sell.
At present, it’s much easier than before to start this business because of the numerous technologies you can use to market your company. You’ll also need to consider other challenges like dealing with different people, legal formalities, etc., but overall it is not an impossible task.
Real estate is one of the best ways to make money in the long run. Over time, property prices rise, and you can make good returns on your investment. Most importantly, you won’t need large sums of cash to start with real estate investments. Even small homes can bring in decent profits if you choose the right strategy for investing in properties.
