Real estate is among the top four industries that are more likely to make you a millionaire. Long before the internet and software produced the Jeff Bezos’ and Larry Ellison's we all wish we could emulate, the real estate industry was minting millionaires every year.
With a growing population and a diminishing stock of homes available for rent or sale, real estate remains a magnet for people looking to strike it rich. The only difference this time is that we want to get rich faster. So in an industry that demands more patience than most, how do you make money fast in real estate?
5 Fastest Ways To Make Money In Real Estate
Here are the 5 quickest ways to profit from real estate today:
1. Flipping Houses
Do you have some renovating experience? If so, you could make money renovating and flipping houses. This business involves buying distressed homes in good neighbourhoods and then updating and then selling them at a profit.
Flipping houses can be very profitable, but there’s a learning curve. You have to know what you are doing, including choosing the right contractors as you will not be able to do all of the work yourself. Identifying houses with renovation potential is another skill you will have to master as that is where the value is.
Ideally, you want to spend as little as possible on renovations while making sure the house has all the features buyers look for in houses in that neighbourhood. Spend too much renovating the house and you may end up in the red when you finally sell. You can also run out of funds before you finish renovating.
But for people who have done their homework, have enough working capital, and know how to spot fixer-uppers with potential, flipping houses is a good way to make quick cash. By the way, you can also do this with commercial property.
But what if you don’t have the money to buy the fixer-upper?
2. Contract Flipping
You will be surprised to learn that you can make money in real estate without investing any of your money. So those with poor credit or who can’t raise the deposit required for a mortgage shouldn’t feel locked out of the real estate market. With the right skill-set, you can try your hand at contract flipping.
Contract flipping is where you match property sellers with buyers and claim a portion of the sale price for your efforts. What you do is identify homeowners whose circumstances may require that they sell their homes to avoid foreclosure or some other negative circumstance. These could be people who are struggling to keep up with mortgage payments or some other distressed owner.
While it may not be easy to find distressed homeowners, finding a motivated buyer isn’t as difficult especially if the price isn’t too high. Essentially, you will be leveraging your negotiation and selling skills for profit. With ears in the right areas, it certainly is possible to make money this way.
3. Invest in a Rental Property
One of the traditional ways to make money in real estate is to simply buy and hold. With residential property prices in Canada rising every year, increasing 23 percent year-over-year in January 2022, this is as lucrative as most investments you can make today.
So you could make a tidy profit by simply buying a property and waiting a year before selling. Or you invest in a rental property and collect rental income while its market value appreciates. Depending on your city, short-term rentals are also a lucrative option. Websites like Airbnb have taken most of the pain out of marketing your rental and collecting payments.
With a rental property, you can start making money from your investment immediately and still be guaranteed a healthy profit if and when you decide to sell up. Make a few renovations or cosmetic touch-ups and you could bump up your profit even more.
4. Invest in Land
Not many of us can raise enough money to buy or have sufficient credit to finance a home or commercial building purchase. That doesn’t mean we should give up on our real estate dreams. At least not for those that can raise enough to buy land.
Normally investors buy land to develop into some kind of property. If you lack the capital to build, another way to build equity or squeeze value out of land is to just let the land sit and gain value. After a year or two, you should be able to sell for a profit.
There are other ways you can make money from your land, including leasing a section for cell towers or any temporary structures a business may put up there with your consent. That, however, depends on the location of your lot. Location is also key for any land that you may want to lease out for agricultural use.
5. Offer Ancillary Support Services
You don’t have to actually own real estate to get your own piece of this lucrative market. The industry needs support services that don’t have the same barriers of entry in comparison. If you grind, you can make just as much money as you would with an investment property, perhaps even faster.
The trick is to find a service you can offer to property owners and investors. You could offer cleaning, photography, staging, and a myriad other services sellers need to prepare their properties for sale.
The real estate market has never been riper for investment than it is now. There’re fortunes to be made for those willing to put in the hours. Before you invest your hard-earned money, though, do your research, seek qualified advice, and think all your options through.
So which of the ways of making money out of real estate we have discussed seem like a good fit for you?