There are a lot of different ways to make an income through real estate, whether inherited property or commercial investments. You can make a passive income by buying and keeping the property, or you make a more active income by flipping contracts, renovating, or adding value to a property. Here are a few different ways to earn money through property.
Long-Term Residential Rentals
One of the most common ways to earn an income from a property is to use long-term buy-and-hold residential rentals. People will always need somewhere to live, and that means there’s a demand for rentals. Do research first and take advice from real estate experts like Jacob A. Kupp. Keep the most important principle of buying a property in mind: location, location, location.
The location will help your property to increase value over time and will help you to find a tenant much faster to rent out your property on a long-term basis. If you’re thinking about long-term residential rentals, you need the right location. This matters more than the state the property is in. A run-down home in a desirable area can still be a good investment.
Lease options can be a good way to get into real estate investment without having to put in a lot of capital or have strong credit. Lease with an option to buy. This works well when the real estate market is climbing, as you’re arranging a pre-set price to buy the property in the future.
If the property market goes up by a large amount, you can buy the property at a discounted price. You could also choose to sell your rights for the purchase to somebody else. As long as this is an option and not set in stone, you could turn a good profit.
Home Renovation Flips
Thanks to the popularity of home renovation TV programs, the renovation flip market is always growing. A reasonable amount of money can be made, but it can be difficult to do. If you don’t have the knowledge or the experience, you could actually end up losing money if you don’t buy the right property. If you buy a property that needs a lot of work done, this could cost you more than you’ll make back on the sale.
Look for the worst home in the best area you can afford. This is where value can be discovered. What will the home be worth after you have made repairs and improvements? You’ll need a reliable contractor, who can help you work out this value. It might be tempting to buy sight-unseen at auction, but if you don’t know what you’re doing, this is a big risk. It can be quite easy to make money on a home-renovation flip, as long as you understand the underlying costs and potential value of the property that you buy.
Don’t try to bite off more than you can chew, and look for creative ways to solve problems and crunch the numbers.