Investing in real estate is a tried and true way to generate steady investment returns, and a good way to make your money work for you on a long-term basis.
So in this article, we share 6 of the top ways to make money in real estate.
#1 Single-Family Rental Homes
Buying and renting out single-family homes is one of the easiest and most popular ways to make money with real estate.
Whether you have one or two rentals that you self manage, or you operate a hedge fund, single-family rentals can provide investors with a great way to generate a monthly income, fund retirement, and build multigenerational wealth.
And perhaps for this reason more than any other, real estate has become Americans’ top investment choice.
#2 “Rehab and Flip” Invest Properties
“Flipping” houses is another way to generate high profits as a real estate investor, but before you flip a house you’ll usually need to rehab the property.
The best property investments in this field are usually the properties that require substantial work. After investing to rehab the property, you can make many thousands of dollars in profit, usually after a few weeks.
Many larger investors rehab and flip some of their properties, while rehabbing and holding others to generate long-term wealth. But if you are just getting started in real estate, there are several things you need to consider to determine whether you want to flip investment properties or hold them as rental property.
#3 Multi-Family Rental Homes
Multi-family homes can be very profitable, but for real estate investors who are just beginning or don’t want to employ the staff to operate large multi-family properties, it’s usually better to focus on single-family homes.
As a matter of fact, one of the criteria we suggest for choosing the best cash flow investment homes is that they are not close to multi-family properties because of the noise and traffic.
Advantages of multi-family investment properties include:
- Investors can purchase a multi-family property and live in one of the units, while the other units produce income.
- For small investors, a multi-family rental property can help with intermediate vacancies. Since the property has multiple tenants, a single vacancy won’t shutoff all cash flow.
#4 Wholesaling Investment Properties
Wholesaling real estate involves finding and buying investment properties that are sold to investors at a discount below retail. Just like all wholesale businesses, a real estate wholesaler provides a needful service for which he makes a small profit.
To excel at wholesaling investment properties you need the skill to find a large number of high quality investment properties, and have the network to sell those properties quickly.
Successful real estate wholesalers have a research team, in addition to an administrative staff, to find the volume of properties needed every month. So, wholesaling real estate on a large enough scale to make a respectable profit is a significantly different business model from investing in rental properties.
#5 Vacation Rentals
Investing in a vacation rental in an area you love to vacation is a great way to provide lodging for yourself while traveling, and have a property that generates income the remainder of the year.
Real estate markets for vacation destinations can fluctuate more than other markets, so be careful to buy these properties when the market is fairly valued from a historic prospective. And just as with all rental property, you’ll probably make more money using professionals to manage your vacation properties.
#6 NNN Leasing
If you have the money to invest in a big commercial real estate holding, NNN leasing can be one of the easiest ways to produce a truly passive income from real estate.
A triple net (NNN) lease is structured as a turnkey investment property in which the tenant is responsible for paying the three major expenses associated with commercial real estate ownership: property tax, insurance, and maintenance. The rent the landlord receives from the tenant is in effect net of expenses.
Conclusion
There are several great ways to generate profits from real estate investments. Depending on your investing goals, though, specific types of real estate investing will be more advantageous.
As a real estate wholesaler, Graystone Investment Group specializes in putting real estate deals together for our clients to accomplish their investment goals, to both generate monthly cash flow and build long-term wealth.
If you are interested in learning more about working with Graystone Investment Group, please fill out our Investor Profile, or contact us direct.
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