When new investors first look into how to make money from real estate investment, they often get bombarded with a lot of seemingly conflicting advice. The “experts” all have different opinions, and there’s no room for any varying investing techniques or methods. With so many “right” and “wrong” ways to make money with your investments, all of which seem to contradict each other, it’s easy to get overwhelmed.
Fortunately, when you break the process down and understand that there are actually a lot of different options and opportunities to profit from real estate investing, it becomes a lot simpler and a lot more straightforward. Let’s take a look at just a few of the ways that you can profit from your investments without making a career out of it.
Find Passive Investment Opportunities
First of all, a lot of investors view REITs (real estate investment trusts) as beginner investment opportunities. Granted, you do not have a lot of control over where your money goes when you buy shares in an REIT, but when you choose the right trust, you’ll be almost guaranteed that the investments they make on your behalf will be profitable. This, in turn, will guarantee that you see positive returns on your investment every quarter when you receive your equity payout.
In addition to REITs, you can also make money by joining a real estate investment club and/or investing in projects on real estate crowdfunding platforms. With a real estate investment club, you’ll be able to network with other investors and real estate professionals, and you’ll have opportunities to invest in exclusive equity deals that the club offers. With a real estate crowdfunding platform, you can pick and choose properties to invest in, and you can choose to invest as much or as little as you want, giving you more freedom to manage your investment portfolio.
All of these opportunities are extremely passive, as they all involve the purchase of equity, rather than the direct purchase of property. You will never have to concern yourself with finding tenants or maintaining these properties, as you would with a direct, individual purchase. However, that’s not to say that directly owning real estate is a bad way to make money, either. If you are going to go that route, though, you’ll want to find ways to make your investment as passive as possible.
One good way to make sure that your investments are more passive than active is to buy turnkey properties that come with a property management firm in place. The best turnkey deals not only include property management, maintenance, and repairs, but they also include tenant acquisition and will take care of all of the day-to-day tasks associated with rental properties.
Turnkey properties do tend to cost more than properties that are not move-in ready with property management and tenant acquisition services, but consider how much time and money you’ll save when you purchase an investment property that is ready to start making money immediately. Instead of worrying that you put more into this investment at the front end, think of how much more time you’ll have to find more investments and continue to grow your portfolio.
Don’t Pay Your Mortgage Down – Buy Another Investment Property Instead
Speaking of new investments and portfolio growth, this final tip for how to make money from real estate investment is a bit counterintuitive. You might think that you’ll make more profits faster if you have the opportunity to pay off the mortgage on an investment property. However, it’s a much better idea to put your extra income into another investment and to collect income on both of these at the same time.
If you do this, you’ll have two properties appreciating over the long term, instead of one. Plus, you’ll be getting monthly cash flow on both, and both mortgage payments will be taken care of with rental fees. What you “lose” in interest, you’ll more than make up for in appreciated value and more income.
These are just a few of the ways you can make money from real estate investment. Follow these tips, and you’ll almost certainly watch your wealth grow.