Here are some simple thoughts on how to make money in real estate!
1. Single-Family Rental Properties
Buying and renting out single-family homes is one of the most common and simple ways to make money with real estate. When looking, location is essentially the biggest factor in appreciation. Home improvements can also help create appreciation. Putting in a new bathroom or remodeling the kitchen and having an open concept are some ways to try and increase the value of a home.
Whether you have one, two or multiple rentals that you can self-manage, these rentals can provide you with a monthly income and start a fund for retirement ultimately building multigenerational wealth in years to come.
2. Rehab/Flip Properties
“Flipping” houses is the new trend to generating high profits in real estate. The catch to this is before you actually flip the house, you have to renovate the property and that typically requires cash on hand.
There are some properties that simply need cosmetic work and some require substantial work. Depending on your portfolio, you can determine whether to hold the property to rent out or turn around and sell it for a large profit.
3. Multi-Family Rental Homes
Multi-Family homes can be very profitable, especially if you are just starting out and are able to owner occupy the property while the other units produce income. Like any other property, location is still the most important component to influence potential renters to select your rental. Another criteria to consider is to not be close to other multi-family properties because of noise and traffic.
Many tenants pay a fixed amount per month and this goes up with inflation and demand. You can then take out your costs from running the units and claim the remaining portion as rental income. When you have multiple tenants, a single vacancy won't shutoff all the other cash flow.
5. Vacation Rentals
Investing in an area you love to vacation is a great way to build vacation rentals and also provide yourself a place to enjoy while generating income during the rest of the year. A key note, markets for vacations destinations can fluctuate more than the average market, so make sure you do your homework to make sure the properties are fairly priced when making the purchase. It's advised as with all properties, it is important to use a REALTOR® to help assist in the process of purchasing and selling.
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