Real estate is the fundamental factor on which virtually all of society sits upon. As the character Gerald O’Hara in Gone with the Wind put it, “Land is the only thing in the world worth workin’ for, worth fightin’ for, worth dyin’ for, because it’s the only thing that lasts.”
With this in mind, getting into real estate as a business is one of the best ways to earn a living. While certainly not immune to the ups and downs of the economy at-large, real estate remains an enduring necessity. People need a place to live, companies need a place to do business, and so forth. Even the internet depends on real estate to function since data centers and other components of internet infrastructure need land to sit upon.
So what’s the catch? If there is one, it’s the fact that buying and selling real estate has been an ongoing business for thousands of years; those who want to enter this industry need to know where to go and what to do in order to beat the well-established competition. What’s more, they need to have the acumen, discipline, and grit to triumph over the headaches and setbacks they will inevitably encounter.
To help get started, here’s the shortlist of the best ways to make money in real estate:
Fix and Flip
The median age of a house in the United States is 37 years. While many homeowners take good care of their property, many others allow it to fall into disrepair. These fixer-uppers present a great opportunity for those interested in making money with real estate. The key is to focus on areas where the demand for housing outpaces the supply. For example, Las Vegas is a city where flipping houses is a viable business opportunity due to steady population growth. Not only are there plenty of properties in need of renovation, but hard money lenders in Las Vegas are ready and willing to make financing easy. The same can be said for other cities and regions where the demand for housing is high.
While the fix and flip approach is a great way to make a quick profit in real estate, there’s something to be said for options that provide a more long-term source of revenue. One of the best options for achieving this goal is to invest in rental property. Buying housing and renting it out means stable monthly income for years if not decades. The drawback is the constant need to maintain the rental property, as well as screening tenants to ensure their ability to pay their rent when it’s due. However, if the inevitable repair or problem tenant is accounted for, most landlords are able to reliably earn a profit. What’s more, most upgrades and repairs to rental properties can be written off on your taxes, providing a cushion for landlords to maneuver financially.
The golden rule in real estate is “Location, location, location.” In other words, the value of a piece of property is relative to the desire for the area it’s in. This creates an opportunity for real estate investors if they can correctly speculate which areas will become more valuable in the future. Buying lots and buildings at a cut-rate and investing in them at the right time can prove incredibly lucrative.
An offshoot of speculation involves buying land which will be redeveloped in the near future. For instance, a small neighborhood located alongside a major road might be targeted by developers to be bulldozed and the land converted to commercial zoning. Someone who swoops in and buys up several houses beforehand can make a respectable profit once the developers get started.
Major cities across the United States are in need of affordable housing. While many communities in these cities are currently resistant to that idea, the pressure for low-income families to have a decent place to live will eventually become unavoidable. Those who choose to invest in affordable housing projects today will reap the financial benefits in the future.
Virtually everything we do as a society and a species depends on having access to land. With this in mind, real estate is a secure and stable business to get involved in, but that doesn’t mean it’s not without its risks and perils. Those getting into real estate as a business need to start by focusing on a specific model for generating income. Do that and you’ll be on your way to business success.
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