There are many investment strategies a real estate investor may choose from. If you consult with various investors, you will get to know different ways of making money in real estate.However, choosing one depends on what type of real estate investor you really are. For example, if you are one who is not patient enough to wait for the money in the future, then consider wholesaling real estate. With wholesaling real estate, you make the profit right away. Hence, this strategy of making money in real estate might be the right thing for you!
Another great way for making money in real estate is investing in rental properties. Moreover, if you ask any real estate investor who succeeded with investing in rental properties, he/she will assure you that the best way to invest money is by buying rental properties.
So, which strategy should you adopt? In this blog, we will help you decide between buying rental properties and wholesaling real estate. Additionally, we will answer such questions like: “How to start buying rental properties?” and “How to wholesale real estate?” Keep on reading to find out!
#1 How to Get Rich with Rental Properties
If you are wondering how to get rich, investing in rental properties is the answer. However, to make a fortune when buying rental properties, you should consider the following aspects:
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Investment Strategies
Traditional rentals are one of the most popular forms of investment strategies when you’re planning on renting out your investment property to tenants. The next step after buying rental properties is finding tenants that will occupy your investment property for a long period of time. Typically, the lease agreement between the landlord and tenants is signed for a year. Consequently, after the end of the contract it is possible to renew it if both parties have been satisfied. Nevertheless, after the end of a contract, due to some reasons, the landlord may search for new tenants. The biggest advantage of turning your investment property into a long term rental property is having a steady rental income.
Renting through Airbnb is seen as one of the best ways of making money in real estate. With short term rentals, you attract business travelers and/or tourists who need only a short term stay. The difference between a hotel and an Airbnb investment property is that the Airbnb landlord hosts guests in his/her private property. On one hand, a real estate investor may provide a room in his/her own house or apartment. On the other hand, he/she may start buying rental properties with the sole purpose of starting a business. “How to get rich with rental properties?” By buying rental properties and renting them on the Airbnb market.
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How to Find Rental Properties
The key to success when buying rental properties is the location. However, it is a tough challenge for a house investor to find rental properties. But we have a solution for you. All you have to do is to conduct a real estate market analysis. A real estate market analysis is a great way to analyze the location/neighborhood of potential income properties. Furthermore, with real estate market analysis you will be able to compare your property of choice to other similar income properties. In addition, you will explore the state of the current market in order to take advantage of it. For example, you might choose to invest in an area in the condition of a buyer’s market. Another benefit of conducting the analysis is knowing the property’s value and not overpaying. Last but not least, knowing the property price will certainly help you in establishing the rent you charge your tenants. This is because the rent typically falls between 0.8% and 1.1% of the market value of a property.
#2 How to Buy Rental Properties with No Money
While some investors are interested in how to invest money wisely, others are curious about buying rental properties with no money. Well, buying rental properties with no money is a very challenging activity. Yet, it is possible. In order to succeed with buying income properties without any money, you need to conduct a lot of research and invest time and effort in the process. When you have planned to purchase income property investments without having financial assets, make sure to research various loan programs. Additionally, hard money lenders could help with the purchase of income property investments in case the real estate investor cannot afford the wanted investment.
#3 What Is Real Estate Wholesaling?
Wholesaling real estate is one of the most popular investment strategies among beginner investors. This is mainly due to the fact that you do not need an official license to practice it. Moreover, you can make a fast profit when wholesaling houses without the need to invest your own money. Wholesaling real estate is the process of finding properties and negotiating with the seller for a price. Additionally, you will be signing a wholesale real estate contract with the seller. Finally, you need to find a potential house investor to buy the property at a higher price than the negotiated one. The great part about wholesaling real estate is that the real estate wholesaler can skip the part of buying a property, but still make some profit without investing a penny.
#4 How to Become a Successful Real Estate Wholesaler
The first step is to sign a wholesale real estate contract with a seller for a house price under the estimated market value. Then, find a potential house investor and sell the property for a much bigger amount. Moreover, make sure to have a good knowledge about the marketing strategies. A successful real estate wholesaler uses direct marketing to find sellers. Another important aspect is to build a real estate network to find the best deals as well as cash buyers. Negotiating skills are crucial when wholesaling real estate. So, make sure you master the skill of negotiating in order to become a successful real estate wholesaler. Further, get some knowledge of the real estate market in the city/ state at the current moment as well as its forecast. Be sure to state the benefits of the property you offer. Be helpful in suggesting appropriate investment strategies for the property, depending on the local housing market. Make your offered property seem to be the best real estate deal.
#5 Advantages of Wholesaling Houses
How to make money in real estate? Well, wholesaling houses is a great way to start. In order to bring your attention to this strategy, we will mention the advantages of wholesaling real estate. These are, namely:
- Little or no capital is needed to start
- No need for official education or license
- The transaction is done within a short period of time or even within a day
- There will not be any expenses for you such as renovation, fixing, contractors, etc.
Now that you know all about buying rental properties and wholesaling real estate, you can confidently choose the best real estate investment strategy for you.
To learn more about all the aspects of buying rental properties as well as wholesaling real estate, continue reading our blog.