Real estate is one of the best methods of investing at the moment. It is a great way to steadily accumulate wealth. If you have never invested in real estate, now is a great time to start. We all know things got a little weird and very stressful in 2020, leading some to wonder how exactly investing in real estate can be used to make a profit in 2021. The market is doing great with demand high and prices rising. You might have to mix things up a bit this year to really make some money off it, and this is NOT investment advice (just ideas). The decisions you make for your investment future must be your own, because it depends on whether you’re playing the short-game or long-game and your situation…PLUS there are no guarantees in investments. There is always a risk. You have to decide what risk you are willing to take!
This is the most traditional way of making money through real estate. This simply involves buying residential property, then renting it out to others. Sometimes the house needs a little work, but this also means you can end up renting for a higher price in the end. The key is to have monthly rental expenses that are lower than the rent for the property, meaning you make profit every month. The downside of this is it can be expensive to buy property out right, but there are many places offering mortgage for very little money down. Once you own multiple properties, you can make enough money from the properties to live off of.
AirBNB Rental Properties
This has become an increasingly popular method of real estate investment in the past few years. While Airbnb was struggling last year due to the pandemic, it has recovered in the past few months. Buying property to rent through Airbnb takes a little more research than the typical rental property. It’s typically best to buy property in areas where tourists would be looking to rent through Airbnb. Because rent is based on nights stayed, you can typically make more money than traditional rental properties, but you will have to deal with more problems along the way.
Flipping real estate involves buying run down homes at a cheap price, fixing it up, then selling it to make a profit. This method of real estate investing takes more work than most. You also have to invest more money than just buying the home, due to repair costs. This is also a riskier method if you do not do your research correctly. You need to know what the local market looks like, so you aren’t trying to sell the house for more than what people are willing to pay and you’re not putting so much money in that you barely make a profit or even lose money. Flipping also takes more time than most to make money, because of the time it takes to repair the property.
Real estate investment partnerships involve multiple individual investors pooling their money together to invest in real estate. You typically play a much more passive role in these, as it is up to one person to handle all the buying and selling. You are then entitled to a part of the profit. Make sure you do your due diligence on any partnerships you plan on joining.
While these are not all of the possible ways to invest in real estate, they are the simplest for beginners. One thing to keep in mind with real estate is that the market is constantly changing. This makes it a solid investment versus something like the stock market which fluctuates all the time.