Looking to learn how to make money with investment properties? Investing in properties is often thought to require a significant amount of money.
Due to these beliefs, many potential investors have backed out before even giving it a chance.
This is not true as investment properties have produced many millionaires and billionaires. From Warren Buffet to Donald Trump, real estate has made a lot of people rich.
If you are looking to make money with investment properties but are not sure where to start, this is the blog for you.
Highlighted below are ten simple ways on how to make money with investment properties.
1. Become a Commercial Real Estate Investor
You can experience a number of challenges when investing in a commercial property. Especially if it is your first time buying a house, I assume this is a common feeling. But it doesn’t have to be.
Commercial real estate investing entails buying, developing, renovating, and upgrading properties and then selling them to earn considerable profits.
After all the expenses are paid, this investment generates positive cash flow, which is what attracts many investors to it.
2. Get Into Vacation Rentals
Renting a vacation home remains a top option for travelers who prefer the idea of staying in a home away from home.
If your home or apartment is near a tourist destination, you can make money by renting it out on a short-term basis.
However, it is important to note that some states prevent vacation rentals or regulate them. Hence, before offering vacation rentals on sites like HomeAway, or Airbnb, confirm that your city’s bylaws allow them.
Finally, consider the cost of extra services like cleaning for guests before setting your rental price. After all, being profitable is the goal here.
3. By Offering Lease Options
As its name implies, it is another viable way you can make money with investment properties.
The concept of a lease option is when you buy or own real estate, rent it out to a tenant and give the tenant a chance to buy it after a certain period.
Lease options allow you to earn passive income through rentals, as well as sell the property during bull markets at a profit.
A lease option prevents you from selling the property as long as a rental agreement exists between you and your tenant.
4. By Buying and Holding
You need to know that passive income is generated when you own an investment property that collects rent. When you find the right rental property, you end up making money while you are at work or even when you are on vacation.
This method entails the buying of real estate with the main intent of holding onto it long-term, renting it out, and watching the worth increase over time before selling it for a huge profit.
5. You Can Become a Real Estate Flipper
The idea is to buy the right properties at the right time, put as little money as you can into them during the renovation process and then sell them off.
This is a great way to make money, if you know how to find the right properties, and have the skills to supervise the renovations yourself.
It also helps if you understand a property’s underlying costs and know its potential worth after you have fixed it up.
6. Earn through Contract Flipping
With contract flipping, you find a property for sale, sign a contract for that property, and then find a buyer whom you can flip that contract to at a higher price to make a profit. This is different from the regular estate flipping where you buy, renovate, and sell off the property.
Typically, you are more or less like a middle man who purchases a property from a distressed seller and then transfers ownership to a new buyer at a much higher rate to make a profit.
7. Use Hard-Money Lending or Become a Hard-Money Lender Yourself
Unlike traditional lenders, hard-money lenders offer short-term loans to people who would not qualify for them. Usually, these loans are for short periods, so the interest rates tend to be high.
The first investment property that you purchase can be financed by hard money lenders. Buying an investment property through this option may be the best course of action if you’re certain about it but don’t have the money to do so.
It is also possible to become a hard money lender, but you will need enough capital to get started.
However, note that there is a certain level of risk associated with hard-money lending, but there is also more reward as the interest rate is high.
8. Earn a Passive Income through Real Estate Investment Trusts
You can also invest in real estate investment trusts (REITs) and earn a passive income based on the amount of money you invested.
REITs come from companies that own several commercial properties. These companies offer their shares to investors and then pass on some gain to investors.
Investors get paid after REIT tenants pay their rent to the REIT. This happens after the REIT removes the building and operating expenses from the rent.
9. Make Money through Short Sales
A short-sale property owner buys it from a mortgage lender who cannot make the mortgage payments and is willing to sell the property at a lower price.
You can then decide to flip the property at a much higher price or turn it into a rental property to earn.
Yet, this process might be difficult, and time-consuming due to the level of paperwork required for the transfer of ownership.
10. Buy Land Banking Opportunities
A common and incredibly profitable strategy for investing in real estate is to buy land banking opportunities. This is a great strategy for several reasons: it’s simple to learn, it’s easy to do and, perhaps above all else, it’s an extremely effective strategy if done correctly.
Land banking is a type of bottom-up real estate investing that’s based on the premise that every property in an area has its own location value. With land banking, you can buy land at a bargain price when it is still undeveloped, and let the property appreciate in value so when it is ready for development you can reap substantial profits.
Landbank investing makes good sense for those who want to avoid the headaches that come with owning actively managed properties.
What is the fastest way on how to make money with investment properties?
Real estate wholesaling (contract flipping), fixing and flipping, and bird-dogging are among the best and fastest ways you can make money in investment properties.
Beginners with little capital or experience can make money with wholesaling and bird-dogging. Real estate flipping works best for experienced investors.
As a real estate wholesaler, your profit is the difference between your buy price and the price at which you sell the property.
Bird doggers buy distressed properties from motivated owners at the lowest possible price, then turn around and sell them to interested buyers at a higher price.
Can investment properties make you rich?
Yes, investment properties can make you rich. Real estate investments could make you a millionaire if you owned and managed properties that increased in value over time.
Is making money through investment properties difficult?
These days, investing in properties is one of the simplest ways to make money. You can make money with investment properties in a variety of ways, and that means there are a variety of opportunities for investors who want to take a serious look at what’s available.
There are a variety of investment properties that you can choose from to make money. You can invest in simple, low-cost dwellings or businesses. These include a house, a car, a piece of land, and a franchise. The various stages of turning your investment’s profit may be much easier compared to other high-risk possibilities.
Is house flipping profitable?
It is highly profitable to flip houses, especially if you are handy and can do renovations yourself without spending a lot on labor.
Besides, the more you outsource, the more your costs rise and your profits decrease, so you should keep that in mind.
Can you make a living off of investment properties?
Yes, you can make money through investment properties in three main ways:
- Your property’s value can rise to the point where you sell it and gain a significant profit.
- By investing in non-physical real estate like REITs, you can receive dividends or an active income.
- You can specialize in flipping by renovating houses quickly and selling them for a profit.
Making money through long-term or short-term investment projects is possible with investment properties. A short-term investment property is one you buy, remodel or renovate, and then sell at a profit within a short timeframe. If you don’t like to hold on to your investment properties for a long period of time, this can be an excellent alternative.
Investing in properties doesn’t require a large amount of capital as long as you follow the steps outlined above. For starters, you can make your money by investing in investment trusts, and then work your way up from there.
Finally, here are other ways to legitimately make quick money, should you be in dire need of money and need it as soon as within a day.
I hope you found this blog helpful. Thanks for reading.