Home Finance The Best Way to Make Money in Real Estate: 5 Tips for the New Investor

The Best Way to Make Money in Real Estate: 5 Tips for the New Investor

7 min read
The Best Way to Make Money in Real Estate: 5 Tips for the New Investor

It’s estimated that millennials will spend about 45% of their income on rent before they turn 30. This adds up to about $90,000.

However, this larger amount of money spent on rent means that houses will likely be bought later on average, which makes housing a less lucrative market.

With the constant give and take of the real estate business, it can seem challenging to make any money at it. The good news is that we’re here to help.

We’ll give you some advice on the best way to make money in real estate in the sections below.

1. Appreciation

The best way to make money in real estate is appreciation. Appreciation simply means that a property gains value over time.

Appreciation can happen in any number of ways. For instance, if the value of your neighborhood goes up or down, so too does the value of your home.

The value of the neighborhood will depend on what’s around it. If you have a lot of job opportunities or good schools, the homes nearby will be worth more.

Flipping properties has become a trend these past few years, though it may be slowing down now. The practice involves buying a property (ideally, one that’s rundown, neglected, or low in value) and redesigning it.

If done correctly (and there’s no one way to do it right or wrong), you should be able to then sell the property at a profit. If you need help selling, a cash for houses company may be a good place to start.

2. Rental Properties

As we’ve mentioned before, the price of rent has been going up in recent years. This means that investing in rental properties could be a good idea. The bad news is that since rental properties will draw in more of a profit during their lifetime, current owners can justify charging more for them.

Must Read:  10 Key Elements of a Contract for Real Estate

You could always attempt to flip the apartments in hopes that they attract wealthier renters, but that runs its own set of risks. For instance, apartments are valued differently than homes are. Homes are valued based on the price of similar properties in the area, while apartments are evaluated on the cap system, which measures risk and likelihood of someone renting the property.

Flipping can also be an issue because a lot more goes into flipping a set of apartments than a single home.

The Best Way to Make Money in Real Estate: There’s Not Just One

It’s hard to say what the best way to make money in real estate is. Truth be told, there are a lot of different approaches that can be lucrative, and things can change very quickly.

Plus, a lot of your options and obstacles will depend on factors beyond your control. A bad economy can hurt your business just as much as any decision you make.

If you want to know more about technology, education, lifestyle topics, and how they all relate to business, please visit our site.

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