Ways to Make Money in Real Estate Investing

Real estate has long been considered a stable investment opportunity. Here are some viable ways to make money in real estate:

Flipping Houses

Flipping properties can require very little capital (I know you have heard differently).

What is flipping

Real estate flipping is the process of finding a motivated home seller, negotiating and signing a contract to buy the property for significantly less than market value. and then selling the contract to another buyer (who is typically interested in improving the property) for more than you initially negotiated.

By having a network of potential buyers already established, house flippers often sell the property quickly for without having muchif anyof their own money tied into the transaction. Having that network of buyers lined up ahead of time to minimize the risk and time involved with the transaction is so important.

House Rehabbing

House rehabbing is pretty straight forward. Much like house flipping; investors are looking for houses that they can negotiate to buy for less than market value. If this is the case they also intend to make improvements to the property in order to sell it for considerably more than they have invested in it. Many investors choose to hire someone else to do the work, while others do much of it themselves. Either way, youll need to know how to identify issues and estimate repair costs, since this will be factored into a profitable sale price.

Successful house rehabbers can often make sizable profits without a lot of risk, provided they can sell the property before they must make any payments on the mortgage.

Property Rental

Though it requires more capital up front, many investors favor buying single-family homes as rental properties.

If necessary, the investor will make improvements and then rent or lease the home, creating a monthly revenue stream and a few decent tax deductions each year. Furthermore, a substantial profit can be made if the owner decides to sell the property later down the road. Owning rental property makes you a landlord. Youll need a sound rental contract with your tenant, and youll be responsible for making repairs that the tenants are not contractually obligated to administer themselves. If youre not comfortable being a landlord, talk to your real estate agent about how to find a property management company that can do many of the day-to-day landlord tasks for a monthly fee.