How quickly you double your money, however, depends on how big your budget is. The more money you initially put into your investment, the more ways you can utilize that money for quick profit. On top of that, how to make money in real estate also relies heavily on the amount of effort and time you as the property owner are willing to give your investment.
Rent by Room When Investing in Real Estate
Making money with rental properties on a long-term basis is not something new. In fact, this is one of the most widely used real estate investment strategies. Long-term rental properties give their owners high occupancy rates making them great assets that generate cash flow constantly.
However, the positive cash flow received from long-term rental properties may not be very high. If you are wondering how to double your money with little money, you can simply change how you rent out your investment property. Rent each room separately, rather than renting out the whole property to one tenant.
Your best bet for finding tenants willing to pay a fairly high rent for a single room is college students. Buy a rental property near a college town and advertise it for this demographic, and you will be doubling your money in no time.
How to Double Your Money Using Fix and Flip
If you have a bigger budget to work with for investing in real estate, you may want to consider the fix and flip strategy. First buy an investment property that needs some renovations, then resell it quickly at a higher price after fixing it.
With a bigger budget and a more adventurous attitude, you can buy cheaper rundown properties and renovate them significantly. Making the property livable and attractive again will surely give a very high return on investment in no time. Just be sure to weigh the expenses of the renovation against the after repair value to ensure you will double your investment.
Related: How to Fix and Flip Foreclosed Homes
Rent Short-Term When Investing in Real Estate
Stepping away from traditional rental strategies and moving towards more modern means of renting out your investment property may yield a much higher return on investment than you ever conceived. In fact, a successful short-term investment property rented out as an Airbnb can double your money in absolutely no time. The key here is to buy an investment property that potential short-term tenants could not pass up. You must also keep up with the repairs, cleaning, and extra services for this property. Essentially, how to double your money with this investment requires a lot of time and effort on your part to manage the property and advertise it correctly. But it can be done!
How to Double Your Money Using Buy and Hold
The buy and hold method of investing in real estate depends significantly on property appreciation. When buying an investment property for this method, try to look in areas that are up-and-coming. Also look in areas that are established as being in high demand. If you have a larger budget, you can afford to buy single-family properties in pricier neighborhoods that guarantee a high return on investment when selling an investment property. However, if you are investing with little money, try to buy a single-family property in an area that is slowly appreciating in value. Up-and-coming neighborhoods may be just outside city centers. Buying a property in this kind of area will allow you to maximize the return on your investment but only after a few years have gone by.
Use Property Investment Data
Regardless of the strategy you use when investing in real estate, you must always use property investment data. This data allows you to understand the market, as well as the best way to invest money in it. Furthermore, real estate investment tools use this data to give you the margins on any property before actually investing in real estate. For example, if you wish to double your money by investing in real estate in the next year, an investment property calculator will let you know if this is possible for the property of your choice.
Sign up to try Mashvisor’s investment property calculator now.
The Bottom Line
Investing in real estate to double your money or make a large amount of profit can be done. However, how fast it can be done is a whole other story. You can invest in a property that can double your initial investment after fifty years, or after just one year.
Maximizing your profit in real estate will also depend greatly on the amount of effort you are willing to put into your investment. If you manage an Airbnb investment very well, for example, you may be seeing a high positive cash flow in no time! However, if you are thinking of investing passively to make large amounts of money in a short amount of time, think again. Odds are passive investment will take much longer to make you a significant income.
To learn all you need to know about real estate investing to maximize profit, visit Mashvisor.