Investing in real estate is a great way to earn money. Depending on the type of investing you choose, you won’t even need a lot of money or effort. However, the real estate market isn’t a joke. Unless you have at least some beginner info in your sleeve, you can end up without any profits and an unwanted property on your hands. So, here are a few ways you can try your hand at real estate and make a profit.
Becoming a landlord
This is one of the most popular ways of real estate investment and also one of the easiest ones, but only technically. The reason why people love this type of investing is that the rental property basically pays for itself. Each month you collect rent you can put into the mortgage. Once the mortgage is paid for, you can enjoy pure profit month after month. However, being a landlord has many responsibilities and risks as well. You need to take care of repairs and updates and always risk vacancies. But if you don’t have time to handle your property, you can always hire a professional property manager who will handle all your responsibilities for a fee.
Opt for short-term rentals
It might seem contradictory, but short-term rentals are often more profitable than long-term rentals. If this is your absolute first try in real estate, you might want to stick to a short-term solution because it’s a more secure way to earn back the money you’ve invested. It’s also a great way to secure your finance. These rentals require less supervision so you’ll have time to gain experience before you plunge into the world of renting—it’s a great way to become a real estate professional.
While you might want to do everything yourself because it’s the best way to earn a nice sum of money in the end, it’s definitely not the easiest way to handle things. Unless you have at least some experience with real estate, you will run into a lot of issues when investing in property. Luckily, there are people who know exactly what you need to do, so finding a professional real estate consulting firm such as FM Investment should be your priority. They will advise you on the best property for your needs, sort through thousands of offers and ensure you end up making a profit.
If you ever watched HGTV, you probably know what house flippers do. Usually, they buy cheap property, improve it and sell it for profit. While this approach to real estate investment requires a lot of effort, it can also leave you with a nice profit if you do the job well. Essentially, as long as you’re good with planning and know some basics of home design, you can become a house flipper. If you have enough money, you can just hire experts to handle your renovation while you tackle other projects and still end up with an investment that paid off. You can also team up with a contractor or designer—you can provide the funds, they will offer their time and expertise and you will both make a profit.
Invests in REITs
This is another option suitable for beginners. Investing in real estate investment trusts is similar to stock investment and if you know a few things about that, REITs might be perfect for you. While REITs allow you to earn a passive income and require minimal care, you still need to find the right trust to join and check your investments from time to time. But, what makes this method different is that it allows you to invest in lux properties without spending all your money. However, since they are similar to stocks, REITs depend on the stock market and you won’t get leverage associated with traditional rental real estate.
Rent a room
If you’re really scared of commitment and risks, you can dip your toe into real estate investing waters by renting a part of your home. Websites like Airbnb offer you a lot of freedom: you can take short-term tenants, have at least some prescreening of tenants by the website and get guaranteed protection against damage.
While investing in real estate can be a wonderful way to reap benefits and get good returns, remember that some people also bankrupted themselves this way. So, be sure to hire experts and do good research before you choose to invest.