One of the beauties of real estate investing lies in the endless ways to make money with real estate investments. Diversity and limitless options are a key factor that makes real estate investing one of the best ways to make money nowadays. Various investment strategies, different rental strategies, endless housing markets, active investments vs. passive income, multiple financing options… These and many other factors provide for the many ways of how to make money in real estate. Although there is no single one best way of how to make money in real estate, there are some real estate investment strategies which experts identify as the most lucrative options for real estate investments. So, let’s take a look at them.
Related: The Best Tips in Town for Making Money with Real Estate
How to make money in real estate: Rental properties
Investing in real estate rentals is definitely a top real estate investment strategy. You as a real estate investor buy investment property, perform any needed repairs, and start renting it out to tenants. This sounds easy, but in order to learn how to make money in real estate with rental properties, you have to master a few skills. The first and foremost one is how to buy investment property with high rental potential. You have to learn how to perform real estate market analysis as well as investment property analysis to always buy the best income properties in the US housing market. Make sure to always buy rental property in the best places in the US real estate market to assure maximum profitability. Top locations include areas which will yield good cap rate (real estate experts recommend anything above 8-12%) and good cash on cash return. Focus on the type of property which is best for your area of choice: while in some areas single family homes will attract tenants the most, other areas might be more appropriate for multi family properties, apartments, or even condos. Last but not least, conducing real estate analysis will help you set the optimal rental strategy for your particular location and income property. Whether you should go for traditional rentals or Airbnb rentals depends on your specific situation.
Related: How To Perform A Real Estate Market Analysis
Alternatively, you could get a hold of an investment property calculator – like Mashvisor’s investment property calculator – and buy the best investment properties each and every time. This rental property calculator will perform all needed calculations for you and allow you to make the best real estate investments for the maximum profitability.
To sign up for Mashvisor to buy the best rental properties across the US housing market, click here.
How to make money in real estate: Buy and hold real estate strategy
The buy and hold real estate strategy is another top answer to the question “How to make money in real estate?”. Moreover, it doesn’t have to be either buy and hold real estate or rental properties. Indeed, these two real estate investment strategies work perfectly together. The idea is that you buy investment property in a growing market (make sure to go for a buyer’s market to get a good property price), hold on to the income property for a number of years while renting it out (through traditional rentals or Airbnb rentals), and then sell it (when you enter a seller’s market). The answer to “How to make money in real estate?” when following this investment strategy comes in two forms: In the short term a real estate investor is making money through rental income, and in the long term a real estate investor makes money through real estate appreciation. You should make sure to sell the investment property only after it has appreciated enough in value. No worries, despite changes in the housing market, the value of real estate properties is set to increase over the years.
Once again, make sure to perform real estate market analysis diligently to buy investment property in a top rental market with a high potential for real estate appreciation in the medium to long term.
To sign up for Mashvisor to buy the best investment properties for long-term appreciation across the US housing market, click here.
How to make money in real estate: Fix-and-flip
While some real estate investors aspire for big gains in the long term, other investors would rather cash out as quickly as possible. If you are wondering how to make money in real estate in the short term only, then the fix-and-flip strategy might be the best option for you as a real estate investor. Once again, fix-and-flip starts when you buy investment property. However, this is usually a distressed property which you buy to fix (perform some maintenance work on it) and then flip (sell as soon as possible to a homebuyer or another real estate investor). Although this real estate investment strategy allows you to make quick money, it requires some good knowledge of real estate and a strong real estate investment network to make sure you can find an investment property under market value, to do the repairs efficiently and cost-effectively, and to find a property buyer for the fixed real estate.
To sign up for Mashvisor to buy the best investment properties across the US housing market including for fix-and-flip, click here.
How to make money in real estate: A few general tips
These are just three of the real estate investment strategies available to you out there. However, these are the three top answers to the question “How to make money in real estate?”, according to real estate experts and professionals. To help you out further in the process of becoming a successful real estate investor, we have prepared a list of a few general tips which you should always adhere to if you are wondering how to make money in real estate:
- Keep growing your real estate investment portfolio
Real estate investing is largely learning by doing, so make sure to start out small and then keep expanding your real estate investment portfolio on regular basis. Regardless of which investment strategy you go for, you should use the profits from one real estate deal (or one investment property) to make another real estate deal (or buy another investment property). The best is actually to use a mix of real estate investment strategies to spread out the risks and to take advantage of the benefits of each way of how to make money in real estate. It doesn’t have to be traditional rental income only, or Airbnb rental income only, or real estate appreciation only – it could be all these and many more.
- Build a real estate investment network
No matter which investment strategy you go for, you will need a team of real estate professionals to succeed in the real estate investing world. These real estate experts include other real estate investors, property buyers, property sellers, real estate agents, real estate brokers, real estate attorneys, bankers, home appraisers, handymen, etc. Start building your real estate investment network by being proactive in your communication with other real estate professionals before you even become an investor.
- Hire a real estate agent
Unless you are a real estate professional, chances are that you will be able to score better real estate deals with the help of an agent. Even if you are an expert, it is still recommended to use a real estate agent to save your time and efforts and invest them in something more useful, such as developing your real estate investment strategies.
To sign up for Mashvisor to connect with the best real estate agents across the US, click here.
- Use an investment property calculator
We live in the 21st century, the time of high tech. There is no reason to try to do things – including real estate investing – the traditional way. Grasp new technologies to be a successful real estate investor. The most important real estate investing tool available to investors nowadays is the investment property calculator. Also called a rental property calculator, this tool will provide you with ready results from real estate market analysis and investment property analysis, saving you tons of time and efforts. Mashvisor’s investment property calculator will show you property price, rental income, cap rate, cash on cash return, optimal rental strategy, and others within a couple of minutes – at the neighborhood and the property level. To sum up, using a rental property calculator is the only way to always buy the best investment properties and the ultimate answer to the question “How to make money in real estate?”.
Related: Why an Investment Property Calculator Is Better Than Spreadsheets
To sign up for Mashvisor now and learn how to make money in real estate, click here.