You’ve always heard that investing in real estate is a solid moneymaker, typically with far less risk than other investments like playing the stock market. And the best part? You don’t need an excess of capital or even stellar credit to get started in the real estate investment game.
While investing in real estate can be intimidating and a bit overwhelming at first, there are numerous ways to start earning immediately even if you’re an investing beginner.
But once you gain a bit of experience and start seeing the money roll in, you’ll want to dive further into real estate investing looking for more opportunities.
If you’re ready to earn big, here are five ways you can profit from investing in real estate right now.
1. Long Term Rentals
Considered one of the more traditional methods of earning income through real estate, long term rentals are tried and true. People will always need a place to live. If you’re new to real estate investing you can start small by renting out a multi-unit condo with maybe two or four units total.
This way, you’ll have fewer tenants to look after and ostensibly fewer renter issues to contend with. Be sure when looking for a rental property, to follow the old real estate adage: location, location, location. By renting out in a desirable neighborhood or trending area, you’ll see fewer vacancies and can argue a case for charging higher rents.
And to save even more, you can live in one of the units yourself making you eligible for a residential loan that potentially has lower interest rates and higher loan amounts. Plus, you can save by deciding to manage the property yourself. But, if you’d rather not interact with your tenants, be sure to budget for a property manager.
2. Vacation Rental Properties
It seems like everyone is renting out their home on Airbnb to earn a bit of extra cash. And now, it’s your turn to get in on the action. Typically if you’re renting out your own home as an Airbnb, there will be far less overhead costs and upkeep. You may simply have to do some cleaning and make sure there are fresh sheets and towels.
Your vacation rental will do well if you’re in a popular college town or vacation hotspot like Florida or Hawaii. Of course, you can still do well and see profit if you’re in a different city, though you may end up with fewer consistent renters.
To help increase your returns, especially if you live in a smaller city, you can instead invest in a vacation property within a resort and rent it out, which will generate a steady revenue without much hands-on effort on your part as the resort management can take care of the day-to-day.
With this technique, you’ll see far fewer vacancies and can test the waters in luxury vacation real estate where you can charge even more and see a higher ROI.
3. House Flipping
Made popular by the overwhelming abundance of house flipping shows, fixing up and flipping a home for profit is another great way to earn money from real estate. The idea is relatively simple — you buy a home for as little as possible, make a few renovations then resell the home for profit.
While it’s simple in theory, in practice you’ll want more than HGTV shows to be your house flipping guide, or you could easily find yourself knee-deep in a money pit.
For a successful house flip, partner up with a great contractor and knowledgeable real estate agent who can help you find a cheap home in a great location so it will sell fast and for a great price. Once you’ve assembled a great team, you can start investing in more and more house flips.
4. Buy REITs
Not really the hands-on type? REITs can get you in the real estate investing game without much effort or having to manage a physical property.
REITs, or real estate investment trusts, are funds set up allowing you to invest in companies that run real estate properties such as office buildings, apartments, hotels, and malls, who sell shares and pass the rental income they earn on their properties on to their investors, meaning you.
Typically, REITs are low risk and high yield giving you a decent amount in dividends. While you can take the dividend immediately, you can also choose to reinvest the money back into the REIT to further grow your investment.
5. Rent Out a Room in Your Home
A quick and easy way to see immediate profits from real estate is to rent out a room in your home. You can use the rent to help offset your mortgage, pay off other debts, to reinvest in other rental properties or REITs, or you could finally go on that dream vacation.
While the choice is yours on how to use the extra $500+ in rent, before you rent out a room make sure you screen and do background checks on potential tenants, collect a security deposit, draw up a rental agreement, and research comparable rental rates for your area.
Also, consider which room to give up. For instance, if you give up the master suite or relinquish the entire basement that’s equipped with a kitchen and bathroom, you may be able to charge a higher rent than if you only rent out a small bedroom that shares a bathroom.
Work with an Experienced Real Estate Agent
Whichever real estate investment method you choose, you’ll need a local, experienced real estate agent to help you navigate your housing market and find you the perfect property that will give you the best possible return on your investment.
When you work with Clever, you’ll be connected with a top-rated, skillful Partner Agent who will be your advocate throughout the entire buying and selling process. They’ll take care of all the details, paperwork, and negotiations so you get the best price possible.
With a Clever Partner Agent, you’ll save thousands on commission when you sell your investment properties, plus you may be eligible for our Home Buyer Rebate where you’ll receive $1,000 on homes over $150,000 that you can put towards closing costs. To get started on your new real estate investing venture, contact Clever and connect with a Partner Agent.