How to make money at home? Through real estate. This blog aims to guide you on the best strategies and options available in the real estate market in order to achieve a passive income and start making money from home.
How to Make Money at Home in Real Estate Investing: Basic Rental Properties
When asked “How to make money at home in real estate investing?”, the simplest and first answer that would come to mind would be rental properties. But while the concept of making money at home through rental properties sounds logical, on the practical side of real estate investing, becoming a landlord comes with a large package of tasks and responsibilities that are sure to take up a large portion of your time in order to achieve success with your rental property investment.
There is, however, a remedy that exists to rid landlords of this concern: property management. Professional property management providers, whether individual property managers or property management companies, provide real estate investors with the opportunity to enjoy the passive income that every landlord aspires to achieve, while also eliminating the need to invest any time or effort into dealing with the rental property.
This, of course, comes at a price; property management will be an additional expense on your investment, and the fees average around 10% of each month’s rent, in addition to 100% of the tenant’s first month rent.
Related: Consider Property Management Options for Your Rental Property
How to Make Money at Home in Real Estate Investing: Small Apartment Buildings
A special type of rental properties comes in the form of small apartment buildings. While the same general rules that apply to basic rental properties apply to small apartment buildings as well, the latter has a distinct advantage due to its place in the competition. Small apartment buildings are usually considered too small for REITs to compete over, and too large for new individual investors to consider, making them a great option to invest in if you have the cash.
Hiring property management for your apartment building eliminates the need to manage the property and its tenants on your own and allows to you enjoy the great benefits of a passive rental income that is pouring in from your investment.
Related: How to Make Money in Real Estate Passively
How to Make Money at Home in Real Estate Investing: Investment Groups
If you’re still insisting on investing in a rental property, then investing through investment groups might be the option for you. Investment groups function similarly to mutual funds but are limited to rental properties. They allow you to own one or more rental properties without bearing the responsibilities and tasks associated with being a landlord.
An investment group buys or builds a set of buildings, which are usually apartment buildings, and allows investors to buy the properties through the company, which also means joining the group. The company will operate and manage the properties, advertise vacant units, interview tenants, etc.
Some investment groups can even offer the benefit of eliminating the risks of vacancy by pooling a portion of all units’ rents to guard against vacancies.
How to Make Money at Home in Real Estate Investing: RELPs
RELPs, or Real Estate Limited Partnerships, function similarly to Real Estate Investment Groups. The difference is that a RELP is only formed for a limited duration and between two defined parties. The two sides of a RELP are usually the investor and an experienced property management or real estate development company. The way RELP investments work is that an investor only serves the role of a finance provider for the investment, while the management of the property, its maintenance, renovation, or the construction of the property is handled by the firm.
Investing in RELPs requires a minimal amount of involvement by the investor, but it does not usually generate a passive income. Instead, the real payoff comes when the property is finally sold at a profit before the RELP dissolves.
How to Make Money at Home in Real Estate Investing: REITs
REITs, or Real Estate Investment Trusts, allow investors to invest in real estate in a very similar manner to investing in the stock market. REITs allow for partial ownership over real estate properties through securities. REITs use investors’ money to purchase, operate, and sell investment properties. This also allows investors to invest in different property types instead of sticking to residential real estate properties only; a large portion of REITs specializes in shopping malls, for example, allowing investors to diversify their real estate investments among several different types of properties.
When asked “How to make money at home in real estate?”, tell them REITs is a great option.
How to Make Money at Home in Real Estate Investing: Turnkey
While fix-and-flip is a great strategy for making a quick profit on a property, it often requires a lot of effort, and it is not associated with passive income. Turnkey, on the other hand, is ideal for real estate investors looking for options to make money easily, without much effort. With this strategy, you will buy an investment property which is ready to be rented out, without the need to do any work on it. Additionally, many turnkey real estate investment properties are associated with companies which will handle all the management and any other issues related to the property, turning it into a passive investment.
Related: Why Investing in Turnkey Real Estate Investment Properties Makes Sense
How to Make Money at Home in Real Estate Investing: NNN Lease
Sometimes, big companies and businesses want to use buildings without owning them (because of TAXES). Instead of buying the building, they rent it and pay all costs associated with it, from maintenance, through taxes, to insurance.
Investors who manage to come across such opportunities have the chance to buy the building and enjoy a very highly passive income from their investment.
How to Make Money at Home in Real Estate Investing: Conclusion
While most people associate passive income with rental property investments, there exist a number of other strategies and methods of investing in real estate that can allow the investor to enjoy the same benefits of a passive income without having to invest any amount of effort or time into their investment.
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