When asked the question “how to earn money from home in real estate?”, two answers immediately come to mind:
- Rental properties and
- Property management.
In reality, however, there are several other answers to the question of how to earn money from home using real estate investments. This blog will focus on the ones that are more generally accepted as being easy to get into for both new and experienced real estate investors.
When it comes to making money through real estate without leaving your house, the real estate business offers a number of great opportunities. However, the most obvious and easiest way to get you on your way to making money from home in the real estate investing business is through rental properties.
Rental Properties
How to earn money from home using rental properties?
It’s simple. You purchase an income property or use an existing one, and you rent it out to tenants. Of course, nothing is that simple. When it comes to rental properties, and in order to generate a positive cash flow from your rental property so that you earn money from home, you will need to design your entire real estate investment strategy based on that goal.
This means that there are certain expenses (such as property management) that should be taken into consideration if you’re not looking to be present at or located near your investment property and would rather enjoy the monthly rental income from the comfort of your own home.
Related: How to Invest in Rental Properties Away from Home
How to earn money from home using rental properties will depend on your investment decisions regarding the location of the investment property, the type of lease that you decide to go with (long-term or short-term), and the amount of engagement that the property needs in order to remain functional and generate rental income.
If you’re planning to invest in a long-term rental property that is located 2 states away from you, for example, then the success of this investment will heavily rely on the type of tenants that you agree to rent out the property to and the duration of each lease, the amount of property management that the property needs, and the amount of involvement that you will have to have in your investment.
When trying to figure out how to earn money from home using rental properties, property management will be the greatest asset available to you and will be the service which will allow you to earn money from home.
Property Management
If we were to give the shortest answer to the question “How to earn money from home using rental properties?”, that answer would be: Hire property management.
Professional property management exists for the purpose of saving landlords and real estate investors the time and effort of managing their own rental properties. The reason why investing in rental properties alone won’t allow you to earn money from home is because rental properties need someone to attend to them. The process of renting out an investment property involves a number of tasks and responsibilities that require you to be present at the site of the income property, whether it is to hand over the property and the keys, to collect the rent, to deal with bad tenants, to conduct necessary repairs, or to inspect the property on turnover; these are all tasks that could be avoided by hiring a property management company.
But, of course, property management comes at a price. So, if you’re looking for a way of how to earn money from home using rental properties, do not expect to be able to do it cost-free. Professional property management will usually cost you a fixed percentage of your monthly rent (usually around 10%) in addition to the first month’s rent. Nonetheless, considering your goal to earn money from home with the least amount of effort, this is not a high price to pay.
Related: Professional Property Management: Yes or No? Why or Why Not?
Additional Options
There are other methods that come to mind when thinking how to earn money from home in the real estate business.
One of these methods involves investing in REITs (Real Estate Investment Trusts).
Although they fall under the category of real estate investing, REITs function more closely to stock investments than real estate investments. Investing in REITs allows you to make investments in real estate properties as a part of a fund. You will not be involved in any of the processes related to the property/properties that you’re investing in, and your investment will function just like stocks.
This allows you to earn money from home without getting involved in the buying, managing, renting out, or selling of the income property, which makes it less attractive for investors who are looking for the excitement that the real estate market has to offer.
Related: How to Make Money in Real Estate Passively
Another good option for earning money from home is real estate partnerships.
If you’re looking for an answer to the question “How to earn money from home in the real estate market?”, then real estate partnerships could be the option for you. If you’re looking to invest in a rental property, but don’t want to invest tons of time and effort into the management of the investment property, and at the same time you can’t afford to hire the professionals, then maybe you should be looking for a partner to split the tasks with.
Real estate partnerships allow for more flexibility when it comes to the time and effort invested in a rental property. This is because the terms and conditions of the tasks assigned to each of the investment partners are set by the partners themselves. This means that the time and effort that you’re investing into the income property are based on your preferences and expertise. You could, for example, set the terms so that you only cover tasks that do not require you to leave the comfort of your home or to travel to the rental property; for example, you could be handling administrative tasks such as legal issues and financial record-keeping.
Conclusion
Although there are several other good answers that could be given to the question “How to earn money from home in real estate?”, the answers given above are the experts’ preference when it comes to making money with the least amount of effort.
This does not mean that starting your own real estate investment business will not require you to leave your home, but it means that with a bit of extra effort put into your investment, you could be earning more comfort by eventually making money from home.
Don’t forget to visit our website at Mashvisor.com, where you can find a number of great blogs and articles that can further help you find ways to earn money from home, in addition to other great advice, guides, and tips to get you on your way to success as a real estate investor.