How to Make Money in Real Estate: The 7 Best Ways

The key to making money in real estate seems relatively easy. Buy a real estate investment, find a great tenant, make sure you earn more in rental income than in rental expenses, and voilà! You’ve just learned how to make money in real estate!

Of course, there are many variants of this simple formula. This begs the question: what are the best ways for making money in real estate? Here are our seven best answers.

Single-family Rental Property

Residential real estate for the win! Residential real estate is undoubtedly one of the top investment strategies in the business. In this strategy, a real estate investor purchases a rental property with the intent of renting it out to tenants as a residence. Perhaps the most common form of residential real estate is single-family rentals (SFRs).

Single-family rentals are the prototypical answer when asking “how to make money in real estate”. SFRs are one-unit properties that are rented to individuals or families. They typically include long-term leases and are surefire properties for positive cash flow and cash on cash return (P.S., if you want to know how to calculate cash on cash return using our product, click here!). If you’re wondering how to make money in real estate, you can’t go wrong with the classic SFRs.

Multifamily Rental Property

Sticking with residential real estate, we move on to another type of real estate investment: multifamily rentals. As you can tell by their name, multifamily properties are the multiunit counterparts of SFRs. Multifamily properties span many different types, with anything from duplexes to 32-unit apartment complexes. Much like with single-family properties, a real estate investor would rent out units in a multifamily property for the long-term, although short-term deals are also common. Also just like SFRs, and every type of real estate investment on this list, a multifamily property is a great one to pursue when wondering how to make money in real estate.


Moving on from long-term rentals, we arrive at short-term rentals. And no better to start discussing short-term rentals than with Airbnb. Airbnb is an online short-term rental platform that allows a real estate investor to rent a property to a tenant (AKA guest) who finds the property on the Airbnb website. Airbnb has revolutionized short-term rentals to the point that it has become one of the most ubiquitous and profitable investment strategies. Renting through Airbnb also tends to lead to higher returns than with traditional residential investing. To learn more about the differences and similarities of Airbnb and traditional real estate investing, read this: “Real Estate Investing: Traditional vs. Airbnb Investments”!

Vacation Rentals

Investing in short-term rentals is one of the best answers to “how to make money in real estate”. Luckily, like a traditional real estate investment, short-term rentals can exist in multiple forms. One of the other forms besides Airbnb is through vacation rentals. Vacation rentals are rentals that are not served as a primary residence and can be rented out, but the real estate investor must reside in them for a certain amount of time. As is the case whenever you are buying investment property, you will need a prime location for a vacation rental to be successful. Use Mashvisor’s property search to find the best places to invest in real estate for vacation homes!

Commercial Real Estate

Residential and short-term renting are very profitable investment strategies, but they are not the only ones to take into account. If you’ve ever wondered how to make money in real estate, but do not want to rent out to people, consider commercial real estate! In commercial real estate, a real estate investor rents out to businesses, not potential residents. The obvious advantage is that this form of real estate leads to more income since businesses generate more than individuals do. Buying investment property for commercial real estate purposes is an excellent way to have diversified investments. To learn some of the best methods on how to make money in real estate with this strategy, be sure to check out this blog post: “What Are the Best Ways to Make Money in Commercial Real Estate for Rent?”.

Real Estate Investment Trusts (REITs)

Buying an investment property for any of the previous investment strategies for passive gain is very possible. Still, none of them are inherently passive investments. REITs, however, are arguably the best when asking how to make money in real estate passively. With this method, which does require some real estate investment education, an investor buys shares of a REIT, which invests in multiple investment projects. Not only does this result in passive income, it also provides investors with diversified investments.

Real Estate Wholesaling

Just like REITs, real estate wholesaling is a method that requires considerable real estate investment education for beginners. Unlike REITs, and all the previously mentioned investment strategies, real estate wholesaling does not deal with property ownership. Instead, the investor purchases the contract of a property and directs it to a buyer, with an increased price. The wholesaler acts as the middleman of a real estate transaction. And similar to all the methods presented in this post, real estate wholesaling is one of the best ways when wanting to know how to make money in real estate.

Real estate wholesaling does not last as long as buying investment property for rent, so a wholesaler needs investment tools to stay on track. The best of all investment tools is a rental property calculator, which performs a real estate market analysis, among other functions. To learn more about the calculator and other investment tools, read this post: “6 Must-Have Real Estate Investment Tools!”

All in all, real estate investing is the best way to earn a lot of income through diversified investments. And there’s no one way fits all with real estate: there are many ways to answer the question “how to make money in real estate?”.

For whatever strategy you opt for, you’ll need two things: a real estate investment education and a rental property calculator that can perform a real estate market analysis. Luckily for you, Mashvisor provides both of these necessities! If you’ve ever wanted to know how to make money in real estate, click here to start your 14-day free trial with Mashvisor and subscribe to our services with a 20% discount once you sign up!

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