Real estate has produced more wealth than any other presently known industry. If your only experience with real estate involves paying off your mortgage, then you need to rethink your real estate investing options. You need to consider expanding your real estate portfolio. Based on how real estate makes a millionaire, I still wonder why people are still skeptical about investing in real estate.
When it comes to real estate investing, there are two major ways of making money. You can make money passively by buying and holding. You can also make money actively through flipping, doing renovations and adding value to a home before selling at a higher value or developing new properties.
Investing without money
Another key question people are faced with when it comes to real estate is the question; how to invest without money. It should be noted that real estate investing is a cash-heavy venture and this locks most people out. However, there are a variety of ways to go about it if you don’t have money.
You can try seller financing through lease options. You can also trade fixed assets such as jewelry and cars. You can also take over someone else’s mortgage payment, bring an investment partner who has cash, borrow from a bank, take out a home equity line of credit or utilize the peer-to-peer lending network. The options are many.
However, real ways of getting rich in real estate investing include;
Long-term residential rentals
One of the commonly used ways of making money in real estate is leveraging the aspect of long-term buy-and-hold of residential rentals. People will always be in need of a place to live. This means it can be very lucrative to get engaged in residential rentals. When it comes to residential rentals, location is everything. Location determines the value of a property as well as the amount of rental income your property will generate.
Lease option presents a great way to be involved in real estate without necessarily having to part with a significant amount of capital. This means you lease a property with an option to buy. This method tends to work well when the real estate is increasing in value because, at that time, you can buy a property at a discount. You can evaluate when is the right time to convert a lease into owning a property. If the market is not favorable, you can just decide to continue leasing.
The home flipping culture has grown exponentially. House flipping refers to the process of buying an old home at a lower value and doing key renovations to increase the value of the home. When it comes to flipping, the key question you ask yourself is how much a home will be worthy if you invested in some basic repairs. To accurately determine how much you can make, you need to have a solid relationship with contractors. If you employ the contract flipping method, you will not have to put up a lot of capital at the initial stage of acquiring a home.