If you want to know how to make money in real estate, this article will come very handy.
It contains information that will be helpful, whether you are a new or seasoned in the real estate business.
Most importantly, it contains some top secret tips that many people don’t know about. Real Estate gives many people a lot of money today.
First things first, why Real Estate, right?
The simple answer is – people are making a lot of money from it and there’s still a lot more money to be made!
According to a May 2018 report from the Bureau of Labor Statistics, it is estimated that people made an average of $58,210 annually as brokers or agents in real estate.
This is an industry that still commands the attention of many short-term and long-term investors.
You too can make money in real estate if you do what successful realtors and investors do.
There are top secrets about making money in real estate. Some of these tips can inspire you to make money really fast if you implement them.
That said, keep reading to learn a lot more about making money in real estate.
What is Real Estate?
A Real Estate is a property consisting of land, building and the natural mineral resources found on it.
The term also refers to the profession of buying, selling or renting land, building or housing.
Many people around the world have made a lot of money from real estate. You can make money as well if you also apply what it takes to succeed buying and selling properties.
There are four types of real estate that an individual can specialize on. Each type is dependent on the purpose of the land, building or house.
Types of Real Estate
The four types are:
1. Residential Real Estate
This is a house or building that is created for either a single family or a multi-family unit.
The estate is not used for business but it is available as a residential place.
Of course, the occupants can also use the place to start making money from home. For instance, renting out some rooms or parts for money.
This type of real estate can be designed as apartment or flat, a multi-family house, a terraced house, a co-op, a townhouse, a condominium, a duplex, a residential caravan, a vacation home, etc.
2. Commercial Real Estate
This is a building, land or house that is used for buying and selling of goods and services.
Examples include doctors’ offices, shopping centers, malls, school buildings, hotels, restaurants and other buildings.
As long as these buildings are used to produce income, they fall under commercial real estates.
3. Industrial Real Estate
These are buildings, lands or property used for manufacturing.
The property is used for research, production, storage, and distribution of goods.
Common examples of this type of real estate include factories, research facilities, warehouses, and construction buildings.
In industrial real estates where factories are involved, people can be hired to do factory jobs that pay very well.
This is a real estate which consists of undeveloped land.
It also includes the land used for farming, ranches, outdoor activities and relaxation parks.
Related: How To Rent-to-Own Your Home and Best Sites To Use.
How to Make Money in Real Estate
If you are interested in making money in real estate, there are lots of options that are open to you.
You can start making money whether you own a home or not. You can also make money whether you are a professional realtor or not.
Keep reading to learn more ways of making money with real estate.
1. Become a Listing Agent for Sellers
You can work as a listing agent to make money in real estate.
What you do here is to help house sellers list their properties in platforms where potential buyers see and possibly buy them.
Listing of a property this way is similar to posting direct ads about your products on website or blog. When visitors take action on the ads, you make money.
More so, becoming a listing agent for sellers is like becoming an affiliate marketer where you get to sell another person’s product in exchange for a commission.
A listing agent’s job is to help the seller get a profitable price for the property. He or she must have a strong negotiating skill to extract the best prices from buyers.
The success of a listing agent will also depend on the number of sellers he or she is working for. The more sellers you work for, the more money you would make.
This is similar to the experience of sellers who list their products or services on classifieds sites like Craigslist to make money.
In addition to working with multiple sellers, a listing agent must promote his or her career to attract potential clients with ease.
This can be done through the creation of logos, brochures and other visuals to present to customers and boost the chances of winning clients.
2. Become a Buyer’s Agent
You can make good money in real estate by becoming a buyer’s agent.
Your job description here will include working for individuals or businesses that want to buy a house.
You may need to devote a huge chunk of your time in locating a property for sale and showing them to the buyer.
The buyer relies on the buyer’s agent for all the processes until the transaction is complete.
Buyer’s agents can earn a lot of money, if done right. The earning may be calculated as a percentage of the total valuation of the property.
For instance, if a property is sold for $100,000, the buyer’s agent may earn 5% of this amount, which is $5,000.
This could be an easy way for you to make 1000 dollars really fast without scamming others or without being scammed.
Note though that it doesn’t come easy, especially in the beginning, as you must have spent a lot of years honing your negotiating skill to be able to convince sellers and close deals.
3. Start Flipping Houses
You can make money in real estate by flipping houses.
What this means is that you buy a property under market value, fix it up, and then sell it for a profit.
Surely, this is different from flea market type of flipping where you buy, sell, or trade antiquated or used products.
Making money this way may require investment some of your personal money to buy and fix the home.
You also need a lot of patience and prepare for the possibility of not selling the home on time.
To make the most of flipping homes, you must be able to hunt down bargain homes.
Look out for homes that need minor cosmetic repairs. Then make them look better and more appealing to be able to sell them profitably.
Flipping houses can be risky but can also be extremely rewarding, if done right!
Related: How to Make Money Flipping Phones.
4. Become a Property Manager
A property manager makes good money in real estate. You too can become one and make money regularly, if you do things right.
Yes, this is a way to go if you seek for a consistent stream of residual income. This is income that you make when you are not actually actively working.
Homeowners and investors hire property managers to manage, maintain and repair their properties. The managers may also find renters and collect rent.
Property managers earn a percentage of the rent they have collected every month. In most cases, they earn 10% of the rent collected.
Another earning method for property managers is leasing fees.
If you manage more properties in real estate, you will earn more money.
Also See: How to Make Money with Your Van.
5. Start Selling Short Sales
A short sale is when a mortgaged property is sold below the existing mortgage.
When the owner of a home is behind in mortgage and wants to sell the home for less than what is owed on the existing mortgage, the bank can be approached to accept an amount less valuable existing mortgage.
Of course this should not be compared with one-day sale which is a promotion strategy to sell items at discounted price.
You can make good money in this situation as a listing real estate agent.
You will negotiate with the bank and convince it to take less money.
If the bank accepts the amount, then you list the seller’s home normally and make a huge profit.
To succeed with short sales, all parties in the transaction must agree to it. Also, you must check out the home and become involved in the negotiation process.
Short sales may take time, and so patience is needed. As an agent, you will be completing all the legal processes associated with the short sale.
Also See: Ways to Make Money Reselling Tickets.
6. Become a Commercial Real Estate Agent
You can make money in commercial real estate. Here you can invest in the buying, selling or renting of office or business properties.
To succeed in commercial real estate, you must have extensive knowledge of the valuation of commercial properties.
Also, you must build your career and identity among potential clients and customers.
You can become a broker and earn lucrative monthly income.
Most commercial real estate agents are paid monthly instead of on commission basis.
Another way to make money in commercial real estate is to flip the property. Here, you can buy, develop and resell the property for profit.
The profits in commercial real estate are higher than what obtains with residential real estate.
7. Work as a Broker
You can make money in real estate if you work as a broker.
This is different from a broker of who sells financial instruments like hot penny stocks.
As a real estate broker, you will work in a real estate agent’s office and have agents working under you.
You will also ensure that everyone works legally even as you take care of any legal disputes among the agents working under you.
Apart from the earning from agents’ commissions, you also earn desk fees or advert money from agents.
A desk fee is the money paid by the agent to the broker for using his space or desk.
To work as a broker, you may need to have a real estate agent’s license.
This is demanded in some states or countries.
Yes, a real estate agent’s license is mandatory to have before you can start earning in real estate.
Also See: Differences Between Being Frugal Vs Cheap.
8. Rent a Portion of Your Existing Home
You can make money in real estate by renting a portion of your existing home.
Rent a spare room or the basement to earn money gradually.
Of course, you need to have a house to rent.
You can earn money constantly from the money received from the tenant(s).
This method will help you recoup some money if you are still paying your mortgage and still need help with rent.
9. Invest in Real Estate Investment Trusts (REIT)
You can make money in real estate by investing in Real Estate Investment Trusts (REIT).
Here, you would be investing in the stock market associated with real estate.
Real Estate Investment Trusts or REIT is a fund set up to invest in stocks, bonds in the real estate market.
It is an investment trust that owns and manages a pool of commercial properties and mortgages and other real estate assets.
In REIT, shares can be bought and sold in the stock market.
You can invest in REIT and make money in real estate. There are different types of REITs which include:
- Equity – This is an investment in properties.
- Mortgage – This is an investment in mortgages.
- Hybrid – This is an investment in both properties and mortgages.
You are going to make good money by investing in REIT. This brings high yield to the investor.
Also See: Top Helpful Frugal Living Tips.
10. Prepare Broker Price Opinion (BPO)
You will make money in real estate by preparing the Broker Price Opinion (BPO). This is a report that is used to value homes so they can be sold.
Licensed agents or appraisers can prepare BPOs for the benefits of home sellers.
You can become licensed and get paid good money to prepare BPOs.
The job is simple and you can start by inspecting the homes or the pictures of the home. You can also inspect the exteriors and interiors of the home.
A real estate licensed agent can make from $30 to $100 for each BPO you prepare.
Top Secret Tips Most Don’t Know About Making Money With Real Estate
Here are top secret tips you may not know about making money in this business.
1. Give the Property a Thorough Physical Check Before Buying
If you are into the buying and selling of real estate, then it is important you don’t ignore physical inspection, especially when you are buying.
You can hire a home inspector to give you an unbiased third-party opinion about the home you want to buy.
Yes, inspecting the home before you buy is like testing a product or website in beta testing of products or paid product testing.
If an issue is found during the home inspection, you can use that as a bargaining tool to lower the price of the home.
The extra cost of hiring a home inspector would be worth it in the future.
2. Avoid Bigger Houses Because They Aren’t Always Better
You must always go for houses that are popular with most buyers.
The biggest houses in real estate don’t appeal to many people.
Invest more in smaller houses so you can recoup your investment faster.
In real estate, it is often advised that the worst houses on the block can trade more per square foot than the biggest houses.
Also, the biggest and best houses on the block should be avoided. This is because only a few rich people can actually go for them.
So, avoid bigger and popular houses to save cost.
3. Don’t Buy a House based on Emotions
You should be very careful when buying a house and most definitely not buy based on your emotions.
You will make a poor financial judgment when you buy a home with emotion. This is just as you will make poor buying decision when you shop items from sites like Amazon.
Your emotion will blind you to buy a house because you don’t want to miss out on its design, style, size, paint color, etc.
You may even become obsessed with the colors of the house, the beauty of the architecture, the wideness of the swimming pools, and so on.
Instead, buy only after doing your due diligence in ensuring you are getting a good deal and can make a profit off your purchase.
As you have seen from reading this article, Real estate has always been (and still is) a great way to make money. You can make money as an investor as well as broker or an agent.
You can also make money as a property manager, and by preparing BPO.
Some people make money by investing in Real Estate Investment Trusts (REITs), commercial real estates, by flipping properties.
Take advantage of any of the options above to start making money with real estate. By the way, real estate investment can be a hobby that makes money for you, if you enjoy the process.
Talking about people making money from hobbies they love, below are celebrities that have made a lot of money doing what they love. Some of their stories can inspire you to thrive towards success doing what you love:
- Trey Songz’s Riches and Net Worth
- Rich The Kid’s Riches and Net Worth
- Fat Joe’s Riches and Net Worth
- 2 Chainz’s Riches and Net Worth
- Ludacris’ Riches and Net Worth
- Chris Brown’s Riches and Net Worth
- Fetty Wap’s Riches and Net Worth
- Liza Koshy’s Riches and Net Worth
- LL Cool J’s Riches and Net Worth
- Seth Rogen’s Riches and Net Worth
- Christian Riches and Bale’s Net Worth
- Migos’ Riches and Net Worth
- Margot Robbie’s Riches and Net Worth
- Marlon Wayans’ Riches and Net Worth