The Top 5 Ways to Make Money Investing in Real Estate
Over 90% of the most successful people in the world invest in real estate in one way or another.
And more millionaires are made in real estate than anything else.
There are many ways to make money within this industry, but the trick lies in the kind of strategy you are implementing. Which strategy is the best for each type of deal? What's the best way to turn this property into positive cash flow? These are the questions you should be consistently asking.
With the strong economy, US cities are going through a revival. More jobs are being created and businesses are growing. If you're not investing in real estate, then you're missing out on a lot of money-making opportunities.
Whether you're an old hand or a beginner in real estate, it is important to understand where you are now vis-à-vis your goals and objectives, because it will help you in planning where you want to take your real estate business to. Schedule a free Guided Gap Analysis strategy call with our team of experts, and we will diagnose your situation and help you strategize your investing game plan not only in real estate but also in other opportunities.
According to our research, 83% of the people surveyed not only want to learn how to do real estate, but also want to invest in it. And they should, as this industry is a gold mine—if you know what you're doing. So we've listed out the top 5 ways to make money in real estate.
Let’s look at each strategy in turn…
- Buy and flip. House flipping entails buying houses at a low price and then selling them at a higher price for profit. Easy money, right? It might sound simple, but in fact, flipping houses requires a thorough understanding of the market and knowing which renovations will bring a higher ROI.
- Buy and hold. This popular strategy is used by real estate investors to get positive cash flow out of the property. What it entails is buying a house, renovating it a bit, and renting out the property to generate monthly passive income. There are also investors that invest in properties to hold not only for cash flow but also for appreciation.
- Buying the block. This strategy applies mostly to single-family residences where the price of the home is dependent on the other homes for sale surrounding it. Buying the block basically allows the real estate investor to control the quality of several homes on the same street or area. The investor buys multiple (if not all) homes in the neighbourhood, so he or she can control the control the community as well as the price of each home.
- Forced appreciation. Knowing your target market enables you to understand which strategy to adopt. For example, in a community dominated by millennials, you have to fix up your property according to what they want. Millennials want to live and eat where they work, so adding enhancements that suit their needs means getting a higher rent. This concept goes for every possible customer avatar.
- Diversification. We all know the saying "Don't put all your eggs in one basket". This is just as true for real estate investing. It might be enticing to focus on the most lucrative strategy, but what happens when you hit a snag? There are diverse kinds of deals that you can do so you don't limit yourself to one strategy. You can invest in three-bedroom houses, one-or-two-bedroom houses, commercial properties and level two duplexes all at the same time. The secret is knowing what strategy to apply for each type of property and location to get the most profit out of it.
The possibilities are endless in real estate investing, and with the booming real estate industry, these opportunities will continue to grow. But the game changer between either successful investments with high returns and losing a lot of money is your strategy.
Don't gamble your success—work with an expert mentor or team to strategize your real estate investing game plan. If you take away nothing else from this article, you'll at least be set mentoring with successful investors who have done it themselves and are lighting the way for you.
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