House of Cash: 5 Ways to Make Money in Real Estate
Are you looking to make a profit on property? If so, there are good and bad ways to go about it. Read on for 5 ways to make money in real estate that add up.
Are you looking to enter the world of buying and selling real estate? If so, you could be in for a handsome profit. Whether you buy or sell homes, retail buildings, or something else, there’s money to be made.
But that money only comes in if you know how to properly handle your real estate properties. It’s a little more involved than simply buying a property and turning around and selling it.
So how can you make it big in the real estate world? We’re here to tell you exactly how to do it. Keep reading for five ways to make money in real estate.
1. Take Advantage of Appreciation
The worth of real estate fluctuates constantly. Sometimes that worth changes a little and sometimes it changes a lot.
Over time, the value of your property will increase. Things like inflation and land being used up making this happen. As the value of the property goes up you can earn more than you spent on the property.
This is one way you can bring in money from real estate properties. By watching the market and selling at the right time you can make a good amount of money from a property.
For example, let’s say you purchased a property for $100,000. A year down the road, the value of that property has depreciated to $80,000. That’s not a good time to sell.
But, if you wait a little longer, you could be in for a nice treat. Once the market is up again, the property is deemed worth $130,000. That’s when you sell, earning yourself a nice profit of around $30,000.
Market appreciation isn’t the only way to make money from real estate, but it’s a nice perk that simply comes with how the market works.
2. Purchase Fixer-Uppers
Buying a property that can’t be improved upon may not be the best way to go. Instead, consider buying property that needs some help.
Why would you purposely buy a property that has problems? Because you can fix those problems and sell the property for more.
True, you’ll have to put some money into repairing or fixing up the property. You may buy a lot and build a retail strip or a nice modern house. In both cases, you can bring in more money than you spent.
The key is to watch the numbers and make sure they play out in your favor. Before buying a property, make sure you can make the necessary changes that will allow you to sell it for more than it cost you.
Don’t forget to factor in every change you intend to make. If you purchase a home for $230,000 and spend $50,000 repairing it but it only brings the home value to $280,000, you didn’t make a good decision.
Plan more money for your reno or landscaping budget then you think you’ll need. Surprises often come up. As long as you can sell the property for more than you put into it, you stand to make a profit.
Flipping homes can feel intimidating, but you don’t have to go it alone. High Return Real Estate and other companies can help make your job easier.
3. Rent it Out
Renting out your property is a great way to make money off your real estate. Whether it comes from rent or buildings, rental income just keeps on coming in.
Do you live near a student-heavy area? Purchase a home near the local university and rent it out to students. Charging a few hundred dollars per room will bring you a sizable regular income.
Or, rent it out as a single family home. That brings in a good-sized monthly payment as well.
Land can be used for all sorts of things. Is your plot perfect for the local archery club to shoot on? Let them rent it from you and you’ll have constant revenue.
And of course, you can rent retail space too. The possibilities really are endless.
4. Build Equity
Having renters is great for building equity. The longer you have the property, the more equity will build up. But you can expedite the process using renters.
How does this work? The monthly payments your renters send to you can be applied to the mortgage principal. The more you pay that down, the more equity you have in the house.
Then, if you decide to sell, that equity can help you bring in a bigger profit.
5. Create a Short Term Rental
Is there a room in your home you don’t currently use? Or maybe an entire basement? If so, turn it into a short-term rental.
This works particularly well if you live by a place or thing that people tend to want to visit. A beach or a famous city work quite well.
You don’t have to live by something special, though. People are always looking for somewhere to stay when they go out of town, and some people don’t love hotels. Give them another option by providing a room or space for them.
Renters love extra perks, such as breakfast, their own shower, a cooking area, and their own bathroom, so if you’re able to offer any of those things, do it. The better accommodations you offer, the more you can charge per night.
Ways to Make Money in Real Estate-It’s Possible!
There are many ways to make money in real estate. You just need to know how to do it.
We’ve talked about five things you can do. Each one can bring you money, and some of them can do so rather quickly.
So pick an idea and run with it. As long as you manage your project well, you’ll see that cash coming in sooner than you might think.
Are you planning to build a house on a plot of land you already own? Check out these pieces of advice first.