Real estate is always a superb asset. Generally, prices of real estate are always on the rise. And you can make a lot of money with real estate. As a matter of fact, there’re as many as 10 best ways for making money in real estate. I’ll be discussing these 10 best ways in this article.
Let’s first understand what makes real estate such a best way to make money in real estate.
Why Real Estate is Precious?
In simple financial terms, real estate is known as an immovable asset. That’s because you can’t move a lot of land or a house from one place to another. The lot or the house or both remain in that place.
Businesses of all sizes and individuals or families require real estate for offices and homes. And they select a suitable location. Since a lot of people are looking for that particular place, the demand for that lot or house goes up.
That’s because of the simple “demand and supply,” equation. When there’s a high demand, prices soar high.
Secondly, everyone knows that they can sell off a lot or house and get money quickly. And get more money too. Even if the lot or house is bought on mortgage or credit, it’s easy to transfer the ownership and yet make a clean profit in a legit way.
These are some reasons that make real estate a very precious asset to own. Now let’s look at the 10 best ways for making money in real estate. You might already know some of these ways. But I will provide a complete guide on the best way to make money in real estate.
10 Best Ways to Make Money in Real Estate
Over the centuries, real estate has always been a bargaining chip, an asset, and also sometimes, a reason for war between nations. In modern times too, this age-old tradition or system continues unabated, though humans are now more civilized.
In our times, there’re different ways to make money with real estate. Below are these 10 different and amazing ways for making money in real estate.
1. Work as an Estate Agent
The median income of a real estate agent in America stands at $92,308 per year, according to information available from top job board, Indeed.com. At some locations, the income of a real estate agent goes as high as $250,000 per year, finds Bureau of Labor Statistics. These figures clearly indicate that dealing in real estate is the topmost and best way to make money in real estate.
Working as a real estate agent doesn’t require any specific qualifications. Even a high school graduate can take up this freelance job. However, you will require in-depth research on the field of real estate dealings, laws, and rates in the area, among others.
Generally, most real estate agents start their careers by working under a real estate company. They gain the necessary experience and expertise in the field before moving on to work as independent contractors for several real estate firms or launch their own real estate company.
As a sub-broker with a real estate agency, you will get a salary plus commissions on successful property deals.
2. Rent Your House
Another best way to make money in real estate is by renting out your house. Thousands of Americans have more than one houses. It could be in the same city or you might have invested money on buying a home to settle after your retirement.
If you have a vacant house, it’s possible to make money on real estate by giving it on short-term or long-term rent.
As a matter of fact, countless Americans, especially those relocating to other cities and towns for work look for houses on rent. You could ask a real estate agent to find a tenant.
Or you can advertise for free that your house is available on lease on real estate websites or even Craigslist. This way, you get a monthly income which could be useful for making investments or building up your savings.
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Renting out a house often has advantages. Firstly, it would be looked after and not neglected due to disuse. And secondly, you retain full control of the house according to the lease contract that you sign. This means, you’re earning extra income on the side even without doing anything.
3. Start a Real Estate Blog
A real estate blog can earn you a lot of money too. Generally, most people falsely believe that starting a blog is difficult, they lack the expertise or they simply don’t have the time for blogging.
Actually, starting a superb real estate blog isn’t all that difficult as you might imagine. All you need is superb knowledge of the real estate market, happenings, affecting factors and other latest trends and issues.
Combine your knowledge of the real estate market in America with superb writing skills and you’re all set to open a real estate blog. All that you would require is a catchy domain name and web hosting. Nowadays, you could buy both by investing as little as $9.99 only per month.
As a real estate blogger, there’re three best ways to make money in real estate. The first one is by subscribing to Google AdSense. When you do so, you’re giving Google- the largest Internet company in the world- to display ads on your blogsite. And whenever somebody clicks on these ads, you make some money.
The second way a real estate blogger makes money is by affiliate links. That means, you have tie-up with real estate companies and brokers to refer them to some potential customers. And you’ll provide links on your blog to these companies.
Whenever any home buyer or renter clicks on these links and buys or rents a house, you get money from the real estate company.
And the third way is by accepting paid ads and sponsored posts from real estate companies that wish to promote themselves through your blogsite. Once your real estate blog becomes famous, it’s possible to earn thousands of Dollars through these three ways.
4. Host with Airbnb
You can also host with Airbnb. This means, you can lease out a room with Airbnb for visitors that want to live away from the hustle and bustle of hotels and resorts and prefer quieter places with homely ambience. All you need to do is signup with Airbnb as a host.
To do so, you’ll have to provide all details such as location of your house, pictures of the room that you intend to offer guests, facilities that you’ll provide such as parking space, complimentary breakfast, air conditioning and place to host pets if any to Airbnb at the time of registering as a host. Airbnb also offers a lot of freebies to their hosts such as insurance of certain stuff in the room that you’ll rent out.
Playing host with Airbnb is very profitable if you’re living in some area that has lots of tourist attractions or a city such as New York that’s frequented by businesspersons.
These are short term leases, usually ranging from three nights to a month. And you can decide how many days you wish to host the property, at the time of registering with Airbnb as a host.
5. Thematic Mutual Funds
American financial institutions offer something known as Thematic Mutual Funds. Some such Thematic Mutual Funds invest on stocks of topmost real estate companies. They provide you with an opportunity to make money on real estate without actually buying or owning any property.
You needn’t have much money to invest on Mutual Funds that invest in stocks of real estate companies. You can begin making money with as little as $5 in investments on real estate Mutual Funds.
There’re at least five superb apps including TD Ameritrade and Robinhood among others, which you can download for free. And you can begin investing on real estate Mutual Funds with as little as $5. You might not get a full unit of the real estate Mutual Fund for that amount. However, you will get the fraction of a unit.
When you buy more and more units, they add up to a considerable number. And as the stocks in the portfolio of the Mutual Fund goes up, so does the value of your investments. This is also the safest way to make money from real estate without actually investing on a lot of land, house or other physical holdings.
6. Real Estate Investment Trusts
Real Estate Investment Trusts (REIT) as they’re known in the capital markets are companies that invest large amounts of money in real estate only. You can call them a mix of crowdfunding and Mutual Funds. And REITs can help you make lots of money on real estate.
When you invest in an REIT, the company will in turn finance some large or expensive properties or buy stocks of a top real estate firm. They can invest either in America or in foreign countries too.
Every REIT has managers to handle the funds they receive from investors. And the only aim of these REIT managers is to invest on the right properties that would fetch profits for the REIT and their investors.
REITs provide you with the best way to make money and invest in real estate without the hassles of owning some property such as a lot, house, or office space.
The longer you stay invested with an REIT, the more your profits. If you have some spare money and don’t know where to invest, consider REITs because their investment values are always rising.
7. Exchange Traded Funds
Exchange-Traded Funds or ETFs are actually Mutual Funds. However, they’re a bit different from Mutual Funds too. That’s because Mutual Funds are not traded daily on the stock markets.
However, ETFs are traded daily on the stock market, similar to shares. That means, their prices can go low or soar high. The price swing depends upon the prices of stocks that an ETF has in its portfolio.
In America, there’re several top ETFs that invest exclusively on stocks of real estate companies. And their prices swing depending on the demand for real estate in the market. You can buy units of an ETF from your stock trading platform and stay invested.
Traditionally, real estate ETFs have been shown to make large profits. That’s because the value of real estate stocks in their portfolios is always on the rise.
There’re several real estate ETFs in America from topmost financial institutions, that’re on offer through the stock market. You can start by buying just one unit and adding more and more as you go along to create own portfolio of real estate ETFs.
Generally, individual investors put their money on more than one ETF from different companies to diversify their holdings in real estate and make more money.
8. Real Estate Stocks
Actually, you can invest directly on stocks of real estate companies too and make money. To do so, you’ll require a stockbroking account. You can open one immediately with any bank or financial institution that provides such an account.
Alternatively, you could try apps such as Acorns which helps you identify and invest in the right stocks of real estate firms in USA and abroad.
Acorns is also a discount brokerage app. That means, you pay zero or very little commissions to Acorns while buying and selling real estate stocks. Acorns also provides the opportunity to invest on fractional shares. That means, if you’re going to invest small amounts of money, you will get a fraction of one stock.
You can keep buying such fractions to add up to one precious stock of a real estate company listed on American and foreign stock exchanges. In fact, investments with Acorns begin with as low as $5.
As I mentioned earlier, you can also use apps such as TD Ameritrade and Robinhood to buy fractional shares. Robinhood and Acorns both offer you a free stock when you subscribe to their paid app and make investments worth a certain amount.
9. Real Estate Crowdfunding
Another best way to make money in real estate is by crowdfunding. That means, you can pick and choose which real estate you wish to invest upon in USA and abroad. There’re lots of crowdfunding platforms that try to raise money for investing on real estate. You can invest as little as $1,000 on real estate through crowdfunding.
When you invest some money, the crowdfunding platform provides the money to a real estate company which will then buy prime properties. As the value of these properties soar, your investment also fetches higher returns. You can seek the payout of these profits or continue to remain invested.
Most investors that crowdfund real estate remain invested for long. That’s because real estate prices also go through ups and downs depending upon the national economy, demand and supply, and other external factors. However, these prices of real estate always bounce back to yield more returns.
10. Government Real Estate Bonds
Yes, the Federal government also issues real estate bonds in all 50 states of America. Generally, the government doesn’t issue a bond directly, except in specific cases. However, government owned enterprises and departments issue these bonds against property and real estate when they need funds for expansion or other projects.
Traditionally, government real estate bonds have shown to give a return of about 2.5 percent per annum. The longer you retain your investments in these bonds, the higher your returns, since the 2.5 percent also gains more and more interest.
In fact, government real estate bond is one of the safest ways to make money in real estate market, because they’re debt bonds that have a very low risk factor.
You could buy government-backed real estate bonds directly from your bank or credit unions or even from the stock markets in some cases. However, you’ll have to invest the minimum amount that’s stipulated by the government for each bond.
More Best Way to Making Money in Real Estate
There’re two more best ways to make money in real estate other than the 10 best ones that I describe above.
One of them is buying real estate at a low price. Generally, this is possible during foreclosures of a mortgage on a lot or house. However, in such cases, you’ll have to take the risk of buying the place on “as is,” basis.
This means, you might have to spend more money on maintaining the real estate till you find a buyer who pays the higher price and nets you some profits.
The other is buying mortgage notes. These are basically known as debt instruments in the capital market. Normally, mortgage notes are issued by banks and credit unions when they find someone that’s taken credit to buy a house is unable to pay the monthly installments regularly.
In such cases, the money you invest goes towards funding that house. And when the house eventually gets sold, you get a share from the profits.
You really don’t need much money to make money in real estate, if you follow some of the above ways that I describe. Investing little amounts of money in the evergreen real estate market can help you make profits too.
In fact, countless people around the world invest in real estate without actually owning a property. And they make a lot of money in these indirect ways to invest in real estate too. You could also try any of the 10 best ways for making money in real estate.
It’s simple and easy. All that you need is some understanding of the real estate market and some spare cash to invest in your venture.