If you’re thinking of becoming a real estate investor, you’ve probably read a lot of tips regarding the best ways to make money in the business. I’m sure you’ve read about buying rental properties, flipping houses, or wholesaling real estate as some of the best investment strategies. Although that’s true, these are pretty risky and complicated investments and not all property investors find success following them – especially when they don’t have sufficient knowledge on the real estate market, a strong network, and stable finances. So, are there any easy ways to make money in real estate?
This blog lists 6 strategies to join the real estate investing business which are considered easy ways to make money for beginner investors. Without any further introductions, let’s jump right in:
1) Turnkey Investment Properties
A turnkey investment property is one that is fully renovated that a real estate investor can buy and immediately rent out to a tenant. These properties are typically purchased from companies that specialize in the rehabilitation of older properties. Moreover, these companies may also offer property management services to buyers! As a result, this minimizes the amount of time and effort you’d have to put into the rental property.
This investment strategy is especially appealing to aspiring property investors who want exposure to the real estate market but don’t have the time, ability, or interest to renovate a property or handle maintenance issues. Therefore, turnkey investment properties are a form of passive income investments and, hence, one of the easy ways to make money in real estate. (Read this to learn more about turnkey properties and why you should invest in them).
2) Rent-to-Own Investment Properties
These are also known as a “Lease Option” and are good strategies to invest in real estate without capital. This involves a lease contract between you (as a homeowner) and a renter with monthly payments and the option to buy the property during or at the end of the lease period. This is one of the easy ways to make money because renters are usually responsible for maintaining the rental property, reducing your rental expenses.
More importantly, tenants of these investment properties typically pay more than the average renter, giving you an attractive rental income. Thus, if the renter doesn’t buy the property, you’ll still end up with better income. If they do, you have an exit strategy and can move on to your next investment!
3) Buy REO Properties
A bank owned or REO (Real Estate Owned) property is one that has gone through the foreclosure process, yet failed to sell at a foreclosure auction so the lender lists it for sale. Investing in REO properties can be profitable for beginner property investors and are easy ways to make money. First, buying these investment properties can be less risky than buying at foreclosure auctions. Once the property is in the bank’s possession, the lender clears the title of any liens, evicts tenants if needed, and might even do basic repairs to get the property in shape to be sold.
Moreover, lenders want to sell these properties ASAP to minimize losses and, thus, they’re less likely to have inflated prices. In fact, you might even find REO properties for less than market value! A savvy real estate investor will make great returns from renovating REO properties and renting them out for a steady stream of rental income.
If you’re looking for an investment property, click here to start comparing and analyzing the best investment properties in your city and neighborhood of choice using our investment property calculator!
4) Real Estate Investment Trusts
Real estate investment trusts are firms that own, manage, and finance large real estate properties. REITs are some of the best and easy ways to make money and invest in the real estate market with relatively fewer risks. The return on investment you receive from REITs comes in the form of dividends. This investment strategy gives you higher liquidity compared to other real estate investments. This strategy is appealing to property investors who are not looking for direct property ownership. You just invest your money and receive passive income in return. REITs are also great ways to make money in real estate for beginner investors without a large capital.
5) Professional Property Management
This strategy offers two easy ways to make money in real estate. The first one is that you invest in a rental property and hire a professional property management company to do the work for you. These companies will rid you of the responsibilities that come with owning a rental property like finding tenants, collecting rents, doing repairs, eviction, etc.
If you’re not capable or interested in owning rental properties in the first place, the second option is to start your own property management company. Most people in the US housing market are choosing to rent instead of own their homes. As a result, the rental market is strong with more and more real estate investors listing their properties for rent. This made property management a lucrative area to get involved in and one of the easy ways to make money without direct property ownership!
6) Rent on Airbnb (Short-Term Rentals)
Whether you love or hate it, Airbnb is here to stay. The short-term rental site has been gaining enormous popularity in the real estate market as demand for such properties has been increasing in the US housing market. Moreover, more and more cities across the country are allowing residents to list their properties for rent on Airbnb. This presents yet another great investment strategy for a savvy real estate investor.
If you don’t have enough capital to buy an investment property, consider renting your own residence (or even just a room) for the short-term. This gives you an added source of rental income, making this one of the easy ways to make money. One piece of advice: Check your city’s laws and regulations regarding short-term rentals before renting out on Airbnb. We don’t want you to get in trouble with the law!
More Easy Ways to Make Money!
The best thing about real estate is that there are countless ways to invest in it. I’ve only talked about 6 easy investment strategies to make money in the business, but there are more out there! To find out which way to follow, you need to do your due diligence and define your goals. Have you come across a unique way to invest in real estate? Let us know in the comments.
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