Different Ways Of Making Money With Real Estate Properties

Posted on: 26 July 2018

Whereas many people think that buying a home is a form of investment, that won't be true in the case of a primary residence. This is because you can't sell your primary residence to recoup the investment. However, there are still many ways in which you can invest in real estate properties and make money. Here are some of those ways:

Buy and Rent

This is one of the oldest forms of making money on real estate properties; you basically buy a house or other property and make money from it by renting it to others. The premise may seem simple, but there are a few critical factors to consider before taking the plunge. Here are two main tips to help you succeed with buy-to-rent investment:

  • Determine how much your recurring expenses will be to ensure the rental income will cover them all and leave some profit for you
  • Ensure you will be able to manage the rental, either directly or via a property management company, because mismanagement will wreck your investment

Buy and Sell For a Profit

There are also those who make money in the real estate industry by buying homes and then selling for profit. This may be possible if:

  • You can identify attractively priced properties (for example, those whose owners are moving and need to sell fast), buy and sell them for profit at your own pace
  • You can identify defective properties, buy and fix them up, and then sell them for profit
  • You can identify properties in emerging neighbors, buy and hold them for a while, and then sell them for profit after the area has reasonably developed

Buy For Commercial Purposes

Lastly, it may also be possible to make money from a real estate property by buying it and then establishing a commercial interest in it. For example, you can buy a corner property and turn it into a restaurant or you can buy a rural farm and use it as the main base for your ranching endeavors. If this is what you are planning, then you should:

  • Double-check that the location is suitable for the projected business
  • Confirm that buying is better than renting
  • Ensure that you understand the business if you intend to manage it directly
  • Confirm that the zoning regulations will allow you to conduct the said business on the premises

As you can see, there are many ways of making money in the real estate industry. Just make sure you engage a real estate agent to help you with due diligence in each property purchase.