There are many different ways to get rich in the vast variety of investments available to people nowadays. One of the most popular ways to get rich has always been real estate investing. Investing your savings or applying for a mortgage to invest in real estate properties is a financially sound investment that offers little to no risk in most cases. The concept behind the success of real estate investing is that real estate is a commodity that has an ever-increasing demand rate. Overpopulation and immigration in the US have boosted the real estate market because of increased demand nationwide.
There are many ways to get rich through real estate investing. The fact that investing in real estate properties can be financially rewarding in several ways is a big incentive. Compare that with other forms of investments, like commercial or stock investment, and it becomes evidently clear that real estate offers more stability. In other forms of investment, uncertainty and risks are part of the routine. There are ways to get rich off of these investments, but they require consistent improvement, huge initial capital, and extensive managerial skills. The consumer behavior for other investments is also unpredictable, and the behavioral patterns of consumers can affect commercial entities, companies, and stock prices easily.
This is why real estate is one of the most reliable and thus best ways to get rich. It is just safe. Anyone with little experience in dealing with tenants can become a successful property owner and landlord. The possibilities of making profit through return on your real estate investment can be through cash flow (rent), real estate appreciation, easy loan payments, and expansion to a multiple properties real estate investing business.
Ways to Get Rich in Real Estate
1. Rental Income
Investing in a real estate property is never about the short-term profit. One of the most important ways to get rich in real estate is having the patience to sell your property in the future for a substantial profit. However, there are ways that owners can make short-term profit too in order to cover their expenses and build on their profits.
When purchasing a real estate property, most investors immediately revert to renting out to tenants in order to make money off their investment as soon as possible. Now rental income offers many different ways to get rich in real estate. It provides owners with a monthly rental payment, improvement through competition, and a rising profile of the investment property.
The monthly rental income will depend on the location, quality, size, and amenities of the rental property. Some real estate investors are able to get serious profit from rental income, while others are able to cover the costs of their expenses while making small profit margins. The competition that exists between rental property owners allows them to improve and offer better services in order to generate a higher monthly rental income.
Airbnb is one of the most popular ways to get rich through rental income even if it is a relatively new concept. Airbnb gives rental property owners the chance to double their profits through offering services and amenities for short-term guests. The concept of Airbnb comes from earning profit like in vacation rentals or the hotel industry, which it has grown to become a direct competitor to. There are various examples of Airbnb hosts in major cities renting their entire flats through the platform. In Los Angeles, for example, it was reported that Airbnb property owners are able to make a year’s income in 60 days by using Airbnb. These are outstanding figures as far as real estate investors are concerned. Airbnb is without a doubt one of the favorite and easiest ways to get rich in the real estate market today.
Related: How Much Rental Income Should You Be Making?
2. Appreciation Values
The appreciation in the value of real estate properties is the most common way to make serious profit when investing in real estate. Making profit through real estate appreciation is a long-term investment for many owners. If a real estate investor decides to purchase an investment property that is worth $150,000 in today’s market, considering all economic factors and the demand for housing, then that property could easily have a value of $300,000 in 5 years. This makes the investor $150,000 richer than he/she was 5 years ago. This, alternatively, makes appreciation one of the easier ways to get rich in real estate investing.
A real estate investor will need to be careful, however, as not just any property can have that a good appreciation rate. Investing badly in real estate will result in a slow process to becoming richer. Thus, an investor needs at least a basic understanding of the real estate market to invest wisely. If a real estate investor has no experience, then it is advisable to hire a real estate agent who can give detailed analysis of appreciation values for different types of investment properties.
Related: 6 Things to Know About Real Estate Appreciation
3. Easy Loan Payments
Mortgage rates are now at their lowest point since the housing crash of 2007. Real estate investors are able to save up a down payment and apply for a loan to finance their investment ventures. In real estate investments, loans can be easily covered through rental income. If an investor buys an investment property that can be rented out, then the rent will cover the monthly mortgage payments amongst other expenses. This means that the rental income will become your financing tool for the hefty loan that you need to pay back. Once the loan is paid, then the owner has a property on his/her name that was paid for using rental income. This is another example of how real estate can lead an investor to different ways to get rich.
4. Expansion of Properties
Unlike all other investments a person can undertake, in real estate, expansion is not that hard. Once you have had some experience in real estate investing by dealing with tenants, mortgage applications, real estate agents, and the value of properties, then you are able to go through the same process more efficiently for your next investment property. While accumulating profit through rental income or through fix-and-flips in the short-term, a real estate investor can save enough money for a down payment on his/her second rental property. A second property gives the real estate investor double the profit and more ways to get rich faster through real estate investments. Having double the rental income or having future prospects for multiple properties in appreciation value profit is a smart move. This is how real estate tycoons start their real estate investment portfolios.
Related: Buy a Second Investment Property: Why and When?
There are many ways to get rich in real estate as mentioned above. It all depends on the preferences and expectations of each investor and the strategy he/she chooses. While some real estate investors are looking for short-term profits through rentals or other means, there are also those who have a long-term plan in place to become real estate tycoons. Whatever the path you choose, success and profit in real estate will come if you are dedicated enough to make it happen.