Regardless of how much fun real estate investing might be, there is no doubt that all real estate investors are buying investment properties for the sole purpose of making money with real estate. Saying anything else about the motives of real estate investors would be a lie. Thus, we are here to help beginner and expert real estate investors make even more money with their investment properties through the best tips in town.
Best tip for making money with real estate #1: Buy cheap investment properties
The way real estate investors make money is through return on investment in real estate properties, which is determined by the difference between the property price and the rental income. The first way to make more money in real estate investing is thus to minimize the property price, i.e., to buy cheap investment properties. That’s why you should keep an eye on foreclosed homes in your real estate investing location. Foreclosed homes are something a real estate investor should aim for at all times because of the low property price for an excellent property.
Best tip for making money with real estate #2: Push your rental income up
The second tip to make more money with your real estate investments is to drive your rental income up for your existing rental properties. For example, undertake some minor and cheap renovations which will make your rental properties look more luxurious so that you can charge more rent. The trick here is to go for such repairs which cost little but have a major impact on the look of your investment property.
Best tip for making money with real estate #3: Do not use a real estate agent
When buying an investment property and also when selling one, do not hire a real estate agent to find you a good property and seal the deal. Instead, learn how to find the best investment properties yourself, how to negotiate with property sellers, and how to close real estate transactions. Not having to pay a real estate agent’s commissions will save you lots of money and let you make more money from each and every property purchase and sale.
Best tip for making money with real estate #4: Do not use professional property management services
Do the property management for your investment properties on your own. Being a real estate investor also means being a landlord, managing your rental properties, and dealing with your tenants. Make sure to save up from professional property management services’ fees by doing all the required work on your own. That’s one way to make more money from your real estate investments.
Best tip for making money with real estate #5: Expand your real estate investment portfolio regularly
Real estate experts recommend adding a new property to your real estate investment portfolio every 2-3 years. Though it might sound crazy at first, this tip is very important. As a real estate investor, you want to grow at all times, and the way to do that is to constantly add new rental properties to your real estate investment portfolio. Learn how to do that smartly. For example, you can sell an expensive investment property you already own to buy two smaller and less luxurious rental properties which will generate more rental income for you. Or you could and indeed should use the rental income and positive cash flow from your existing rental properties to buy new investment properties. Saving up the positive cash flow will allow you to get the down payment and then help you cover the mortgage payments.
Best tip for making money with real estate #6: Choose the best location
How many times have you heard that location is everything in real estate investing? Be ready to hear it many more times because location is of key importance in making successful real estate investments. Location will determine the property price, the tenants pool, the tenants demand, the rental income, the expenses, the cash flow, the best rental strategy, and many other factors. Thus, always choose the best location for your investment properties, regardless of whether it is close to home or even out of state.
Best tip for making money with real estate #7: Finance your investment properties with mortgage
As a real estate investor who wants to make money, never be afraid or hesitant to finance your investment properties with mortgage. The rental income you will be getting from your tenants will cover the mortgage payments and even provide you with positive cash flow. If you decide to save up all the money necessary to buy an investment property, you will have wasted years of your time before you become a real estate investor.
Best tip for making money with real estate #8: Conduct careful real estate market analysis and investment property analysis
To always make money from your real estate investments, first conduct careful real estate market analysis to determine the best location for your investment property and then investment property analysis to choose the best (most profitable) rental property. Both real estate market analysis and investment property analysis are boring, tedious, and time-consuming, but they are absolutely obligatory for any real estate investor who wants to make money. If you do not make all the necessary calculations prior to buying an investment property, you might end up with a rental property which makes you lose money rather than make money, and that’s what no real estate investor ever wants. Your investment properties should be generating positive cash flow from day one; otherwise, don’t even think about buying them.
Best tip for making money with real estate #9: Use an investment property calculator
To help you out with tip #8, you should take advantage of an investment property calculator in all your real estate transactions if you want to be a competitive real estate investor. If you want to be the best real estate investor in town, choose Mashvisor’s investment property calculator. This real estate investing tool will provide you with all key metrics such as property price, rental income, expenses, cash on cash return, cap rate, and occupancy rate – organized by traditional rentals and Airbnb rentals – for thousands of available investment properties across the US. The computations of Mashvisor’s investment property calculator are highly reliable because they use both traditional and predictive real estate analytics to let you make the best real estate investment decisions. Moreover, by subscribing to Mashvisor, you also get to use the property search engine.
Regardless of whether you are a new or an experienced real estate investor, you definitely want to be making money with real estate. That’s easy, just follow our advice above. Follow our tips to grow your real estate investment portfolio with the best positive cash flow properties in the US real estate market and be the best investor in town.