Real estate might have generated a lot of wealth and riches than other industries, but some individuals still remain skeptical regarding entering into the fray. This is because they think that they require money to get started, while in reality, this is not always the case.
Basically, there are several ways you can generate money in real estate. This may include wholesaling, fix and flipping, and bird-dogging, though they don’t guarantee quick returns or easy money. Apart from these investments, you can also make money in real estate by:
1. Making an Investment in Single-Family Homes
Single-family properties may be perfect investments you can make. They provide a steady stream flow of cash, build wealth, and offer a great ROI (return on investment). These properties may include homes or condos bought with the aim of selling it to single-family buyers on listing platforms, such as Movoto. Some of the common ways to invest in the property include purchasing fixer-uppers, foreclosures, and other assets believed to be undervalued.
For you to buy the properties, you may need to define the investing criteria. An important starting point for this, especially if you are a beginner, is to decide on the best strategy. If you want more returns, then you may need to take on more risks. Among other factors that may influence your decision on buying these properties are location, calculator, finance, and market.
2. Renting Out on Airbnb
If you want to be one of the Airbnb hosts, your intentions need to focus on picking up a side hustle and not begin a full-fledged business. On average, Airbnb hosts make around $920 in a month, but it may vary for different reasons. The platform charges guests before their arrival, and it releases the funds to the payment method of your choice within 24 hours, or immediately they check-in. Hosting fees may range between 3% and 5%, so the listing cost you will see is more than you earn.
Moreover, the niche you need to carve out on Airbnb, whether it’s your entire home or a private wing while you take some time off during the weekend, will determine the amount you make. The more space you rent out, the more you make money. Other costs that may influence your monthly earnings include:
- Seasonal pricing
- Weekly discounts
- VAT in some non-US locations
3. Trying Turnkey Properties
The goal of investing in a turnkey property is to make it simple. Today, there are many turnkey providers in America. Some will purchase, rehab, and sell properties to investors. However, others will just help entrepreneurs look for the properties and let them handle the heavy lifting part of the rehab. If you want to try these properties, you might need to have in-depth research so you can enjoy some benefits. The first benefit you may get is the ability to invest in another country without living there.
Beyond that, turnkey providers rent hundreds of properties every month. Because of this, providers are required to drive leads to every part of the marketing funnel. They may use radio ads, billboards, and newspaper ads to drive tenants and motivated sellers into the business. This means that they can connect you to better deals and tenants faster.
4. Managing Real Estate Properties
Becoming a property manager is one of the greatest ways to generate money in the real estate business. According to salary.com, an average property manager in the US makes around $98,440. However, the earnings may range depending on various factors, including experience, management certifications, education, and extra skills.
With the earnings that property managers make, managing real estate assets can be a lucrative career path, which is worth pursuing. Though if you realize that you make less than an average property manager, you may need to revisit your strategies, like increasing tenant’s rent. While raising rents may lead to loss of tenants and high vacancy rates, handling the process systematically and strategically will improve your rent roll and retain tenants. Apart from raising rents, you can also improve your earnings through:
- Offering additional services like laundry machines
- Getting a license
- Cutting down expenses
- Leveraging technology
5. Establishing a Team
A successful investment company is based on a team effort. A perfect real estate team wins the most, and the best leaders surround themselves with driven, diverse, and smart individuals. Establishing a great team may seem a challenging process, though it’s incredibly important at every stage of the game. Your team of professionals will grow as your real estate business develops, but it would still be better to start on the right foot.
As far as making money in the real estate business is concerned, you need to perform due diligence, gather references, and conduct interviews. You may get recommendations from fellow investors and friends, though don’t take their words for it, especially when you need to work with competent employees. Therefore, before you hire your team, ensure you determine your strategies, market, and niche.
6. Investing in REITs
REITs or Real estate investment trusts are fantastic ways to add income and growth to your general portfolio. Though before you get started with the investment, it may be important to keep in mind that REITs are not the same as other dividend stocks. Most of them are registered with the SEC and traded publicly on the stock exchange, but others are registered and not traded.
Thousands of investors purchase shares and contribute their money to a pool, and a group of professional managers decides on how to make an investment. The importance of REITs is to enable dedicated investors to easily venture into the real estate market. Some of the common types of REITs you can invest in are:
- Residential
- Office
- Retail
- Mortgage
- Healthcare
Conclusion!
The goal of making money in the real estate market may be successful, but doing it alone may be risky and challenging. Buying single-family properties, renting out on Airbnb, and investing in turnkey assets are just a few ways of investing to make money.
While some universities offer disciplinary programs and coursework, which may benefit you as an investor, a degree is not a prerequisite to making money in real estate. Whether or not you have a degree, there are some things that you must know, like the importance of being honest, developing a niche, and understanding the risks, just to name a few.
