Is real estate a good investment? You bet! Whether you are looking for appreciation, equity, tax benefits, or rental income, real estate investing offers multiple forms of profit. For this reason and many others, real estate is often hailed as the best investment people can possibly make.
Here’s another, more specific question: Is real estate a good investment when looking for quick profit? This depends. Mainly, this depends on your definition of “quick”.
Meaning of “Quick” Profit
‘Quick’ for a tortoise is not the same as ‘quick’ for a rabbit. What is quick for one real estate investor may not be quick enough for another. As with many aspects of real estate, there is a wide variety of what may be considered quick. For some, monthly rental payments are considered quick. With certain strategies, some real estate investors can make a profit in just a few days!
Now that we know the answer to the question “Is real estate a good investment for quick profit?”, here are some ways to make that quick profit:
Ways to Make Quick Profit in Real Estate
Buy and Hold
The typical buy and hold strategy is a reliable method to earn two significant profits in real estate: rental income and appreciation. As you may know, real estate appreciation is the increase in the fair market value of an investment property over time. Because it takes a lot of time to develop, appreciation will not be included in our discussion of quick profit.
Rental income, on the other hand, can be earned rather quickly. At the end of each month, the real estate investor receives rent from his/her rental properties. If you have multiple properties, or a property with multiple units, like a large multi-family home, you can earn a lot of money every month. You do not necessarily have to invest in buy and hold properties to earn a lot of rental income. There are definitely other types of strategies out there. But, once again, buy and holds offer not only rental income, but also long-term appreciation.
Find Distressed Sellers
The answer to “Is real estate a good investment for quick profit?” does not only have to be in the form of rental income. In fact, you can make a quick profit by purchasing distressed properties.
A distressed income property is a property that has sat on the MLS for too long, but has not drawn much interest. It can also be a property that is facing pre-foreclosure. As a result, the property’s value downticks, and the seller wants to sell the property as soon as possible.
Since the property’s value is lower than it originally was, the overall purchase becomes cheaper. The purchase also tends to proceed quicker than for other properties. In the end, a buyer can make quick profit by purchasing a cheap property relatively quickly. The property can then be renovated, which will raise its fair market value.
Is real estate a good investment for quick profit? With fix-and-flips it certainly is!
A fix-and-flip is essentially when an investor purchases a property, renovates it (‘fix’), and resells it for a higher price (‘flip’). This process is meant to be quick. As a matter of fact, it is in the investor’s best interest to conduct the fix-and-flip as quickly as possible. If the property cannot be sold after it has been renovated, the real estate investor becomes the owner of the property. This can be a problem if the investor did not plan on such a thing. This is where the risk of this strategy comes from.
Even with its risks, fix-and-flip is a great way to make quick profit in real estate investing. Be sure to plan your fixing expenses properly, research meticulously, and execute efficiently when conducting a fix-and-flip.
Related: Considering a Fix & Flip? Ask Yourself These 3 Questions First
Real estate wholesaling is the answer to two important questions in real estate – “Is real estate a good investment for quick profit?” and “How to invest in real estate with little money?”
Wholesaling is similar to fix-and-flips, just without the renovations and purchase of the property. In real estate wholesaling, an investor does not purchase a property. Instead, the contract of the property is purchased from the seller. Then, the investor sells the contract to a buyer for a higher price, leading to quick profit.
Just like a fix-and-flip, wholesaling can occur within days. As a matter of fact, wholesaling can take place even fewer days than fix-and-flips, since buying and renovating the property takes more time. It also requires more money to fix and flip a property.
As great as wholesaling is by answering positively the question “Is real estate a good investment for quick profit?”, it is not that easy to do. Generally, it is advised for beginner real estate investors to stay away from wholesaling, unless they have a clear understanding of the housing market and its conditions.
Related: Why do new investors fail at real estate wholesaling?
The final answer to “Is real estate a good investment for quick profit?” is to invest in Airbnb.
Airbnb is a short-term rental platform that allows guests to rent out a property. It provides investors – hosts – with the opportunity to list their properties online for many potential tenants – guests – to see. Once tenants, often tourists, have decided to rent out the property, the investor will receive the rent, guaranteed, through Airbnb.
Because it is a short-term rental, Airbnb makes quick profit very possible. Depending on the season, the area, and ultimately your Airbnb property, you could earn high yields in a matter of days.
Related: Turning Your Airbnb Investment Property into a Multi-Profit Property
Is real estate a good investment for quick profit? Most definitely this is the case. There are many methods to achieve this goal. Find out what interests you and go and make a profit quickly!
For more answers to questions, like “Is real estate a good investment?”, head over to Mashvisor’s blog. If you want to take the first steps towards buying investment properties, start your trial with Mashvisor!