What is Real Estate Investing/Investment?
Real estate investment, without a doubt, offers a road to prosperity and riches. However, there are numerous options and techniques for getting started in this industry and in this article, we have written guides on how to invest in real estate with no money, some of which are better suited to beginners than others.
Flipping properties, for example, is a lucrative investment technique, but it is not recommended for novice investors. This is due to the fact that it is a high-risk investment that necessitates a large sum of money, extensive experience, and extensive knowledge of the real estate sector. Instead, here are seven investment strategies that are thought to be the safest ways for beginners to make money in real estate.
Below are the 7 types of real estate investment
1. Single-Family Homes are a good investment.
Investing in long-term residential rentals is one of the most common ways to make money in real estate. People will still need housing. It’s that easy. People are finding that renting makes more financial sense due to rising house prices and mortgage interest rates. As a result, investing in residential rental properties is a sound investment strategy.
Beginner real estate investors should focus on single-family homes rather than multi-family homes. Although multi-family homes are one of the best ways to make money in real estate, they require experience and a large sum of money, which you, as a newcomer to the housing market, are unlikely to have. Single-family homes, on the other hand, are easier to locate, purchase, maintain and manage.
Additionally, single-family homes are more likely to generate positive cash flow and appreciate faster than other property types. These rental property tenants are also long-term tenants who take good care of the property and treat it as though it were their own home. You must note, however, that in order to find a viable rental property in a great area, you must conduct adequate due diligence.
2. Invest in ready-to-move-in (Turnkey) properties
Turnkey real estate is an investment strategy in which a real estate investor purchases a company-owned property. This company will have completed the required repairs and the property will be ready to rent.
These businesses might also provide property management services. These properties are accessible to any novice investor with a small down payment and good credit.
As you can see, one of the best strategies for beginner investors is to invest in turnkey assets. They’re easier to fund, handle, and can start making money right away.
Many real estate investors prefer this method of investing because it helps them to spend less time and money on their properties. As a result, turnkey rental properties provide passive income to investors, making them ideal for newcomers to real estate investment.
3. Don’t Neglect House Hacking and Live for Free
House hacking is one of the simplest and most effective ways to make money in real estate. This is a straightforward investment technique that entails purchasing a primary residence and subletting portions of it. Ideally, you’ll want to purchase a multi-family home (duplex, triplex, or fourplex) so you can live in one unit while renting out the others to generate passive rental income to help pay off your debt. In essence, you’ll be able to live in your home for free.
House hacking is also used by smart beginner real estate investors to generate extra income and save it for a down payment on another investment property. As a result, this investment strategy is not only profitable but also a perfect way to expand your real estate portfolio. Furthermore, since you’ll be a landlord in theory, house hacking helps you to gain experience with property management. House hacking also helps you to gain experience with property management and what it’s like to own a rental property because you’ll technically be a landlord.
4. Use Airbnb to rent out your home.
Love them or hate them, Airbnb rentals are here to stay. Since Airbnb was first founded in 2008, it has quickly become one of the best ways to make money in real estate. The rental demand for such properties continues to rise as travelers increasingly prefer “alternative accommodation” options to hotels. As a result, those interested in making extra money by real estate investments should consider renting out a vacation home (or even a room) on Airbnb to short-term visitors.
Whether you want them or not, Airbnb rentals are here to stay. Since its inception in 2008, Airbnb has rapidly established itself as one of the most lucrative real estate investment opportunities. Travelers are increasingly preferring “alternative lodging” alternatives to hotels, which is driving up rental demand for such properties. You’ll get a high Airbnb occupancy rate and return on investment if you rent out in those locations on Airbnb.
It’s important to remember that not all cities in the United States are Airbnb-friendly; in some, short-term rentals are strictly controlled, whereas in others, they’re outright prohibited! As a result, before listing your rental property on Airbnb, double-check your city’s laws and regulations.
Looking for a decent cash on cash return on an investment property that you can rent out either traditionally or on Airbnb? Start your 14-day free trial with Mashvisor today and use advanced search tools to find the best ones!
5. Put money into REITs (Real Estate Investment Trusts).
One of the many advantages of real estate investments is that it is possible to benefit without actually buying an investment property. If you don’t have enough money to buy a home, you might try other investment strategies. Investing in a real estate investment trust is one of the easiest ways to make money in real estate without owning a home (or REIT).
A REIT is a company that pools money from investors and invests it in a number of income-generating real estate assets. Large apartment buildings, office buildings, retail space, commercial real estate, hotels, and other structures fall under this category. This way, you will invest in real estate as a shareholder rather than as a property owner. In exchange, the real estate investment trust pays you dividends, making this a perfect way to generate passive income from real estate. You’ll make money without having to think about property maintenance, attracting tenants, or any of the other responsibilities that landlords have.
6. Managing Real Estate Assets
If you don’t want to buy a rental house, starting your own property management company is another great way to make money in real estate. Many property owners, for various reasons, find it difficult to manage their investments. Maybe they want to keep their full-time career, maybe they’re buying out-of-state real estate, and so on. These investors will pay a property manager a lot of money to do the job for them (typically 8-10% of monthly rental income).
Furthermore, since many people choose to rent rather than buy a home, the rental market is thriving. As a result, the demand for competent property management has never been stronger, and it may be a lucrative business to join. This is also a good idea if you want to buy your own rental properties in the future so you’ll learn how to handle them properly.
7. Assist Other Investors in Obtaining Capital
Furthermore, since many people choose to rent rather than buy a home, the rental market is thriving. As a result, the demand for competent property management has never been stronger, and it may be a lucrative business to join. This is also a good idea if you want to buy your own rental properties in the future so you’ll learn how to handle them properly.When considering how to start making money in real estate, this might not be the first investment strategy that comes to mind. It is, however, a good way to expand your network, raise money, and earn a high return on investment.
Even if you don’t have a lot of income, you can easily find investors who are looking for hard money loans to fund their investments. As a result, you’ll have a high success rate as long as you effectively find the right offers and provide an amount of money. Furthermore, because of the increased risk, these loans usually have higher interest rates.
They are all short-term loans, so you can enjoy the benefits without having to wait years for your money to come back.
For newcomers to the industry, these are the best ways to make money in real estate. Which one do you think you’ll go for in 2021?