Real estate is a drastically growing industry. Individuals have amassed billions of dollars from the real estate investment. Investment in real estate does not require one to have a designated amount of capital as most prospective investors think. Rather, one should drive to invest the little he or she has in the right way in order to realize profits (Adams, 2017). There are numerous ways in which one can realize high profits at the same time maintain good cash flow. This paper elucidates six different methods applied in real estate investment to realize a profit and how the prospective investor can participate in the profit-making real estate industry.
Firstly, the most traditional method of earning in real estate is an investment in residential rentals. Indeed, one is assured that people will always require a place of residence. The method involves one acquiring the residential property by using some cash on hand as a down payment and then holds the property for a period. Depending on the financial capability of an individual, one can be able to acquire the property at very low or even without a down payment especially if it is an already existing income generating property. Additionally, it is important to note that the location of the residential rentals is a critical role in determining the profits one is bound to make. A serene location offers greater chances of earning more from long-term residential rentals. For instance, run-down homes in a tranquil location are some of the most excellent ventures in real estate one can invest in (Adams, 2017).
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Secondly, leasing of property is another way to get involved in real estate without a huge capital input. The option works well when the real estate market is climbing because the investor creates a pre-determined value that can afterward be used to acquire the property. For instance, if there is substantial climbing of the property market, then you can easily get the property at a discount. Moreover, you may decide to sell the rights of purchase to another individual. As long as there is a bull market in real estate and no rules that bind one to purchase the property at the end of the lease, then one is guaranteed to make a profit (Adams, 2017).
Thirdly, investment in home-renovation flips is a lucrative profit-making form of investment. It is a booming area of real estate where one invests in repairs and fixes of homes. As long as one knows how to choose a home to flip with a renovation, it is straightforward that he or she is bound to make a profit. For example, Matt Larson who has flipped approximately over two thousand houses in Iowa and Illinois says that choosing the ugliest home in the nicest neighborhoods guarantees a real profit. Another renowned flipper is Kent Clothier who started with an investment of five hundred dollars. His breakthrough was finding a motivated buyer and bringing him together with a distressed seller. Since then, he has flipped over 1000 properties and also manages approximately five thousand with his company, Memphis Invest (Adams, 2017).
Fourthly, another profit making method is contract flipping. The method requires very little or no capital input at all. The essential requirement is to be able to locate a distressed seller and a motivated buyer. Though it may be challenging to locate the concerned parties, once you bring the parties together, you reduce the extra hustle of searching for a buyer after entering a deal. To locate a distressed seller, one identifies vacant homes or homes that are struggling with mortgages (Adams, 2017).
Fifthly, investment in the commercial real estate is another great opportunity to accrue profit. In the commercial real estate, developers focus flipping, developing, and add value to the property to increase their net income. They employ techniques such as renovation, upgrading, and consulting on projects that may take a while to observe fruition. As Ali Safavid founder of 5209 Investments located in US West Coast that commercial real estate offers the most income and profit in real estate market as long as one finds a way to add value to the property (Adams, 2017).
Lastly, investment in vacation rentals offers a path to profits in real estate market. If located in a highly trafficked tourist destination, one is bound to make a substantial amount of income from investing in vacation rentals (Ferguson, 2018). For instance in Miami, one can make a significant profit by investing in tourist hot-beds. The business is advantageous since it is not a must you own the property to make money. For example, renown vacation rental investment companies, such as Luxury Retreats and Invited Home owned by Joe Poulin and Michael Joseph don’t own homes but ensure that they offer a high-end consumer experience (Adams, 2017). The trick is one should leverage, network, build bonds, and create systems with property owners. Moreover, ensure first-class services are offered to anyone staying in the homes and profits will be realized (Ferguson, 2018).
Overall, there are many methods of accruing profit in real estate business such as to manage long-term buy-and-hold residential rentals, lease options, home-renovation flips, contract flipping, commercial real estate, and vacation rentals investment. Lack of or limited capital should not be used as an excuse of delay in investing in real estate. Most of the methods discussed above actually don’t rely on the use of starting capital. For instance, thriving real estate tycoons such as Kent Clothier and Matt Larson are successful, and yet they had zero or poor starting capital. Others like Joe Poulin and Michael Joseph have amassed profit in vacation rentals and yet they don’t own most of the vacation rentals. Rather, they offer a high-end consumer experience that is very profitable. By and large, the application of the appropriate method of real estate investment will lead to acquiring huge profits as long as one is committed and has the drive to invest.
References
Adams, R. (2017). 8 Proven Ways to Make Money in Real Estate. Retrieved from https://www.entrepreneur.com/article/298748
Ferguson, M. (2018). The Top Nine Ways to Make Money Investing in Real Estate. Retrieved from https://investfourmore.com/2013/10/10/the-top-nine-ways-to-make-money-investing-in-real-estate/
