Making Money in Real Estate

Success in real estate isn’t only reserved for big-time developers like Louie Santaguida. To It’s similar to the stock market, where you don’t have to be business-oriented be lucrative. In many ways, the real estate industry is better for ordinary people than the stock market. With stocks, you’re typically limited to only 1 or 2 ways to make a profit. Real estate, on the hand, offers a lot more ways of generating income and profits, and with lesser risk, too.

Renting

Renting is one of the major ways of earning money off of real estate investments. You can buy a condo unit, and then rent it out as an apartment. So, month after month, you’re generating a reliable income for yourself. And, when you tire of renting the condo, you will likely be able to sell the unit for a higher price than what you bought it for, providing you with further revenue.

Additionally, you don’t have to rent out a whole house either. You can consider renting out each room separately. It may turn out that renting out 3 rooms to 3 different tenants can get you more money than if you rent out the whole house.  You can also turn a single house into a duplex, so you can rent out to 2 tenants.

You can even rent out a space to businesses. This can lead to more money than with renting to individual tenants, as business spaces tend to go for more than housing units. Also, if you have an established business as a tenant then it’s much safer for you, as they’re not as likely to skip out on the rent.

Buying and Selling

In real estate, there are lots of opportunities to buy lower than in the stock market. Foreclosures are one good option. In addition, sellers may be looking for a quick sale for various reasons, and are thus inclined to accept lower than average market prices. You can even reduce the price simply with your superb negotiating skills.

At the same time, you also have an opportunity to sell high. This tends to happen naturally, especially in high demand markets. But, you can also learn to stage your property properly, so that buyers may be lured to offer a price that’s higher than the market value.

Leveraging

You don’t always have to pay full price on a property to maximize your profits. For example, you can put down a payment for 20% of the value of a condo unit and the mortgage takes care of the rest. But, you can rent out the unit and you get 100% of the rent, and not 20%!

The same thing happens when you buy and sell. Let’s say you buy a house for $380,000 and your down payment is $60,000. But, if you’re able to sell this quickly for $400,000, then that $20,000 markup is yours. All you need to do is to cover the principal payments for the mortgage. You can also recoup the money you spent on improvements that helped the property sell for a higher price.

Real estate is a safer option for generating extra income, as it’s less volatile and there are no margin calls that can wipe out your account balance. So before you jump into the stock market, you may want to look into real estate first.

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