The 3 top ways to start investing in real estate
Investing in real estate is one of the oldest ways to make money. Even during an economic downturn, there is always money to be made when you have the right plan. Since there are many ways to make money when buying property, there are methods to make money no matter what. That’s assuming you know what the possibilities are.
Before you buy any property you should understand the various ways to invest so you can pick the one that’s right for you. Essentially, there is a system that suits every personality type, budget, and need. When you know what they are you can match the one that you think will work best. In this article, we will go over the top ways to invest so you can choose for yourself.
1 – Airbnb
One of the most profitable ways to make money with real estate is to buy an Airbnb property. Short-term lets usually pay more per night than a traditional rental. If you manage to get bookings every night then you will clear far more profit than you would have had you sought long-term renters.
It does depend on a few factors, however. You’ll need to understand the needs of the area where you plan to buy. There has to be a lot of tourism infrastructure and people actively searching for nightly and weekly rentals. If you live in an area where there are a lot of tourists then you will have a lot of bookings as long as you buy the type of property they are looking for.
It takes some research but if you contact a real estate agency such as HKM they can tell you what the market is like in the area you’ve targeted so you can make a decision.
2 – Rental properties
There are areas where Airbnb would never work because there isn’t any demand for nightly or weekly rentals. In some areas, your money is better spent on a property for long-term renters. You can often make many times the cost of your mortgage
For instance, if there is a university in the area then you will have renters every year with very little break between leases. Or, if the housing market is very tight then you can easily find people who are going to rent to get through some tough times since they aren’t able to buy.
3 – House flipping
A popular method of investing in real estate that got trendy due to many home improvement shows is house flipping. If you are a handy person and love challenges then you can buy a house that needs work but is in a good location and fix it up. Then, when you’ve upgraded everything and added a lot of value you can sell it for a profit.
It is the least passive of all the ways to invest. However, the profits can be really big. As long as you don’t mind getting your hands dirty that is.
