Whether you are just starting out or have some experience in Investing in real estate, it is one of the most proven ways to build wealth, create passive income, and diversify your investment portfolio. Investing over the years has changed and has allowed different people to succeed not just the typical experienced investor. With a lot more ways available, real estate investing in 2024 can offer you both the more traditional type of investment and unique creative types of opportunities. In this guide, we’ll explore key ways to make money in real estate, some of their pros and cons, and tips for increasing your success in whichever style of investing you choose.
1. Start to Make Money with Rental Properties.
How can you start to make money Through Long-Term Rental Investments?
Owning rental properties is a very classic option for making a consistent income coming in. It has been proven and tested over a long period. By renting out your home or commercial spaces, you can start to make money in a healthy monthly cash flow meanwhile the property will continue to appreciate over time. Platforms like Zillow or Realtor.com can assist in many ways including how to find a market where you can thrive in.
- Pro: Rental income may be able to provide a steady income and help builds long-term equity.
- Pro: You start to be able to diversify your portfolio, which will help in the long run!
- Con: This option may require more upfront investment and continuous property management.
- Con: The housing market could turn, and you have more in quantity and may suffer if this is the only thing in your portfolio.
2. Real Estate Investment Trusts (REITs) can help make you Returns.
Investing in REITs to make money for the future.
This option is a more unique and less traditional way to invest. Real Estate Investment Trusts (REITs) allow you to invest in real estate without you having to own the physical property. REITs can at times be traded like stocks and can pay you high dividends, this makes it an attractive option for passive income seekers.
- Pro: Easier to get into than the traditional Real Estate and you have less risk.
- Pro: Less management involved, leaving more time for other investment options.
- Con: You do not own the property directly and have little say in what happens to it.
- Con: More for passive income not for those looking for money fast. Patience is your best friend here!
3. Can House Flipping still help make gains?
Buying, Renovating, and Selling to make money in 2024.
We like this option the most because of its versatility and the different ways you can transition from here. House flipping involves buying homes that have good value and need TLC, updating them, and selling them for a profit. You can either sell the home or rent it out for passive income if the deal is too good to pass up yourself. This strategy requires you to have a good understanding of how market trends work and how much renovation costs come out to. (Varies by county).
- Pro: You can start to make more money faster.
- Pro: Allows you the freedom to decide which houses you flip and sell and which ones you keep and rent out.
- Con: The market you’re looking at could be saturated, and prices may be too high to turn a profit.
- Con: Continuing the above con, the construction costs also may be more expensive in your area which will cut into your profit margins.
4. Short-Term Rentals (Airbnb).
Leveraging Vacation Rental Platforms for profit.
If you have a vacation home and don’t stay there often, this might be the option for you! Short-term rentals through companies like Airbnb allow you to make money at a more consistent rate compared to regular rentals. This option will work best in places where there are more tourist hotspots or in cities that have high demand for shorter stays, like families on vacation.
- Pro: During the peak seasons you may see an increase in your profits.
- Pro: No long-term commitments between you and the customer.
- Con: Having to manage the property more and deal with the customers more.
- Con: Income won’t be year-round and in concentrated times. Try to plan around the other downtimes on how to increase your income during these times.
5. Real Estate Crowdfunding.
Fundraise for Real Estate Projects and to start Making Money.
Fundrise or CrowdStreet are some platforms that enable new and experienced investors to Fundraise money for bigger projects such as apartment buildings or maybe even commercial developments. Not having to put so much money in is a risk saver, and when you begin to invest you have to limit your risks. This can be a good option for diversifying your portfolio with little funds needed.
- Pro: Very little funds are needed to get started making money.
- Pro: Little to no management of the propety is required.
- Con: Longer holding times on the assest, not able to sell off as fast if you want to retreat from this strategy.
- Con: Very little control of the property and it’s increasing value.
6. Wholesaling Real Estate.
Flipping Contracts Without Ownership.
Wholesaling includes, amongst many things finding properties that need a little TLC just like number three on our list of flipping houses. Flipping houses and wholesaling can be done at the same time as others in this list. With lower starting costs this option would be perfect if you have fewer funds to start with. First, start researching your area, securing a contract, and selling it to another buyer for a profit. You will not have to own the home in any part of this process, this is just one of the ways to make money in wholesaling in 2024!
- Pro: You won’t have to have as many starting funds, which is good for getting started investing in Real Estate.
- Pro: This process will allow you to branch out to other areas in Real Estate while meeting great connections.
- Con: Building your sales skills will be important, if you’re not into sales we say that you start if this is your chosen path.
- Con: You won’t own the property but this can be a double-edged sword depending on how you look at it.
7. Commercial Real Estate Investments.
You can begin to Make Money Through Offices, Retail, and Warehouses.
Though this option may require more funds to start off, commercial properties bring you back great returns through contracts with other potential retailers and companies. Some of the options in these properties include office spaces, retail outlets, or industrial facilities. Investing may be great, but the risk is just as high be sure to check all your areas and do your research before getting started.
- Pro: Investing in Commercial has longer-term leases and can make you more money over time.
- Pro: If you start in Commercial, you will be able to expand into most of the other options in this list.
- Con: Though this may seem like it can make a lot of funds above the others, it comes with its downsides, especially during the financial crisis it’s not immune.
- Con: You would have to deal with the upkeep of the property, and finding a tenant to move in.
8. Raw Land Investments.
Buying and Selling Undeveloped Land.
Investing in raw land is when you buy the land that’s underappreciated, and needs some love but has a lot of potential. These lands will tend to be cheaper as you are being the land alone. Try to find areas where it’s growing and will either need the land for housing or for agriculture.
- Pro: Since you won’t be buying a property your initial investment won’t be as high and you will own the land.
- Pro: If you find the next up-and-coming area and purchase the right land it can be a very lucrative option if market research is done well.
- Con: The income won’t be as high and as consistent unless you did your research.
- Con: The land may not come to be sold if the growth in the area isn’t predicted right and deeply researched.
9. Real Estate Partnerships & How to Make Money with them.
Collaborating With Other Investors.
These Real Estate partnerships allow you to come together with another investor and see what you both bring to the table. Working with other investors will be helpful especially if it’s to tackle bigger projects. When you come to agreements with your new partner, please make sure you are getting a fair cut and that there are terms for future disagreements whether its about final sales split or what percentage who gets.
- Pro: This options lowers your risks and allows you to share the responsibilities with your partner.
- Pro: You will not have to do everything on your own, you will have a partner to carry half the weight with you.
- Con: The money will have to be distributed depending on the contract you sign.
- Con: When disagreements come up it may be hard to come to an understanding, so please make sure to pick a partner you personally know and are willing to compromise with when needed.
10. Investing in Multi-Family Properties.
Generating Income From Multiple Units.
Multi-family properties can be made up of either duplexes or apartment complexes. These can make you a lot more money as you are building or renting in bulk. Investing in a Multi-Family can provide you the advantage that you will have fewer vacancies if managed properly. Keep a safety net to always have for emergencies that come up with the building or with tenants.
- Pro: Not having to manage as many properties, allows you to hire one company for the entire units.
- Pro: More income because of the quantity of buildings you have, the more updated and adjusted to the markets desire will allow you to make money above the rest of the landlords.
- Con: Will cost a pretty penny and has higher upkeep/ risks.
- Con: If left unkept the property may begin to incurr bills to renovate and may take heavily from your budget.
11. Lease Options to Make Money in 2024.
Renting With the Option to Buy.
With lease options, your tenants rent a property and have the possibility of being able to purchase it in the future. I have seen this before with a family member and have always admired this strategy. I admire this strategy because not only are you helping yourself in real estate but you are helping others in their pursuit of real estate! This strategy will provide flexibility and works perfect in specific market demands. Make sure you research the value of your home and the credentials of the potential buyer/ tenant.
- Pro: Start to make money while also having a potential buyer already placed.
- Pro: Gives you the freedom of not having to manage so directly, this can be a hands-off approach type of option.
- Con: You may face the tenant not buying and could make you have to either restart the process or pivot to other oprions.
- Con: You may not qualify for this option if it’s not a need in your community.
12. Build-to-Rent Developments.
Constructing Properties for Long-Term Rentals.
If you have the funds and time, this option would be perfect for you! This strategy involves building new properties from scratch and designing all the details, this usually is done for rentals or to sell. It’s a popular approach choice if you’re in an area that’s growing and you want to be ahead of the curve and start to make money in Real Estate.
- Pro: Since you have to decide the inside of the home you will be able to charge above market prices since the home is renovated and updated.
- Pro: You get to choose where you place the building, and location in real estate is everything so make sure to do your research on the market.
- Con: This option does take time to make money in but will be worth it if you stick with it!
- Con: The market may change from the time you start the project, and it may not be completed in the time frame.
Key Tips for Success in Real Estate Investing
- Research your Area: Use tools like Zillow, and Redfin, and use local resources to help you deeper understand your market.
- Mix up your Investments: Make sure not to put all your eggs in one basket, this can be dangerous. Add a variety, which could include stocks, REITs, wholesaling, etc.
- Leverage Technology: There are many software that can help you speed up whichever path you use and it’s easier now than ever to get started.
- Understand Tax Benefits: When Investing in Real Estate, you will qualify for many tax deductions and benefits. Talking to a tax consultant will greatly benefit you and reduce the risk of trying to do your taxes.
For more insights into managing your earnings, learning how to make money, and creating a balanced financial strategy, visit Personal Finance Management in 2024: A Complete Guide.
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