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Real estate is one of the most lucrative investments you can make. It’s also a field with many moving parts and time-intensive processes, so it has to be approached carefully if you want to succeed at navigating these investment opportunities.
There are several methods to profit from real estate. Selling specialized listings (such as FSBOs), participating in mortgage lending, and investing in tax liens are all choices suggested by experienced real estate experts. Review the 36 suggestions from real estate professionals below for guidance on how to become lucrative in the real estate market.
Here are the top 36 real estate money-making strategies from industry insiders:
1. Look for FSBO (For Sale by Owner) listings.
Nicholas Thomas, Fit Small Business’s Performance Marketing Relationship Manager
Consider sourcing for sale by owner (FSBO) listings if you’re seeking high-quality leads. While you can do it yourself, it takes time—time that may be better spent selling. Use a lead creation tool like REDX instead, which will offer quality FSBO leads up to 24 hours before any other service. It even searches for missing contact information and compares it to the Do Not Call (DNC) list.
2. Work as a temporary property manager
Ajay Kumar, Co-founder & CEO, TheHouseMonk
Short-term lodging is becoming more important as global travel grows. While property owners may publish ads and manage guests on their own, providing the level of service that visitors demand is difficult. This has given birth to short-term rental property managers, who operate on behalf of landlords to rent out the house and administer the services. Even if not pursued as a long-term business option, short-term rentals are a booming market and a wonderful way for brokers and property managers to supplement their income.
3. Invest in cities that have the potential to grow in the future.
Karla Stefan Singson, Events & PR Lead, PREP – PR, Events & Promotions
Invest in next-generation cities, or consider doing so (cities with high projected growth). Every nation has roughly 10 to 20 cities that qualify as next-wave cities based on economic development. This information may be found in the records of your relevant government agency. I would recommend purchasing real estate in the area.
4. Capital Gains Taxes on Flips Can Be Avoided
Logan Allec, CPA & Owner, Money Done Right
When you flip a property, you usually have to pay taxes on the profit. However, under Section 121 of the Internal Revenue Code, you may deduct up to $250,000 of your gain on a home if you lived in it for at least two of the five years before the date of sale. For married taxpayers filing jointly, this amount rises to $500,000. So, if you’re thinking about conducting a high-end flip, keep this method in mind to maximize your earnings after taxes.
5. Use Virtual Brokerages to Increase Your Splits
Real Estate CEO Tamir Poleg
Joining a real estate brokerage business is an excellent approach to ensure a steady stream of leads. Consider joining a virtual brokerage so that you may work from home. Because they don’t have to pay for a costly office lease, Real, a tech-powered brokerage, is able to generate leads for its agents online and provide up to an 85% split. They also provide agents with their own custom-branded app at no cost on a monthly basis.
6. Purchase an investment property at a fair price.
Rehab Financial Group co-founder Susan Naftulin
Distressed properties might be a terrific investment. Make sure you’re paying a fair price for the property (or less). Don’t be fooled by sellers who price distressed houses based on what they may be worth. To retain your return on investment, just provide what makes sense.
7. Save money by calculating transaction costs.
Yoreevo LLC co-founder James McGrath
Consider transaction fees both when you’re purchasing and when you’re selling. Due to the fact that sellers often bear the highest transaction costs (broker charges), this might have a significant influence on your net profit.
8. Purchase & Rent Multi-family Apartments
Simple Solution Homebuyers co-founder Shelly Persaud
People will continue to rent as long as they need a place to live, therefore you have the option of owning a multi-family property and then renting it to renters to earn monthly revenue. If you’re busy, you can work with a property management business to make this more sustainable, or you may automate the management using a variety of applications and software solutions.
9. Invest in Non-Performing Notes (Non-Performing Notes).
PPR The Note Co. President Dave Van Horn
Non-performing notes are mortgages on which the borrower has defaulted. Rather than foreclosing and selling the property, lenders may sell non-performing mortgages to investors at a significant discount. Investing in non-performing notes has a significant financial risk, therefore act with caution. Expenses associated with foreclosing and obtaining a clear title may run into the tens of thousands of dollars.
11. Become a Trainer & Mentor
KBN Homes, LLC Broker Nancy Wallace-Laabs
If you’ve been working in real estate for a while, you may be able to charge others for your expertise. You may be in line to sell your information, write a book, or produce a training program that details an effective lead generating approach if you have a successful and established track record of real estate transactions.
12. Consider Hard Money Lending as an option.
WeBuyHousesInConnecticut’s Jerryll Noorden
You can conduct hard money lending if you locate a wonderful bargain but don’t have enough money to purchase or repair the property and can’t acquire a regular loan. Simply put, this is a loan from private investors secured by real estate. In essence, one borrows money against the property that they are purchasing. After the home is refurbished and sold, the money will be repaid (usually at a high interest rate). You may become a hard money lender if you have money that isn’t earning you money. Allow your money to earn you more money by putting it to work for you.
13. Make Contact with Landlords to Obtain Listings
Robert Rahmanian, Principal & Co-founder, REAL New York
Representing property owners and landlords can help you stand out from the crowd. When you represent an owner or a landlord, you have a unique opportunity to meet buyers and renters and provide the finest possible service.
14. Get Paid to Keep Foreclosed Homes Safe
Alex Romanov, iwillbuyhouse.com’s Real Estate Acquisitions Manager
Agents may collaborate with banks to visit repossessed homes held by the bank on a regular basis to ensure that they are not being unlawfully occupied by squatters. Fees vary based on the property’s location and the bank with whom the agent is affiliated.
16. Invest in real estate flipping
REtipster.com founder Seth Williams
Real estate and investment specialists often locate undervalued properties and place them under contract. They include contingencies in the contract that state that the contract will be assigned to another buyer within a specific (typically extremely short) time frame. They then search for a buyer prepared to pay slightly more than the contract price and assign the contract to them, retaining the difference as a profit after closure.
17. Commercial Real Estate Lease
President, Customized Real Estate Services, Connie Rankin, LEED, AP
Demand for office and commercial space continues to rise. Commercial real estate leasing may be significantly more profitable than apartment leasing. The reasoning is simple: commissions in commercial real estate are generally substantially greater than commissions in residential real estate since business leases are sometimes five years or longer. You may even ask to be paid a percentage of a company’s earnings as a commission.
18. Extend the scope of your inspection services
National Property Inspections, Inc.’s Executive Vice President, Bill Erickson
Pre-listing inspections are becoming more common as sellers look for important information about their home’s condition in order to get the best price possible at closing. New construction sketch inspections, which are checks undertaken at different phases of the construction process to guarantee that the primary components of a house are placed properly, are also becoming more popular. These are just a handful of the various ways an inspector’s skills might be put to use.
19. Offer Commercial Real Estate for Sale
Bruce Ailion, Real Estate Broker & Attorney, Location Location Location
Commercial brokerage is the place to be if you want to make a lot of money. Success here means earning $250,000 to $750,000 per year, with top producers earning $1,000,000 or more on a regular basis. However, this is not an area for everyone. It’s a game of high bets, high risk, and big returns. This year, I worked on a deal for six months and spent $15,000 in hard expenditures, only to have one of the parties pull out the week before the closing. A total of $90,000 in commissions was lost.
20. Use Zurple to Create Seller Opportunities
The Close’s Managing Editor, Emile L’Eplattenier
Zurple is a one-of-a-kind lead creation tool that focuses on seller leads. When a seller reacts to an online ad put with Zurple, the software’s CRM follows the lead and sends emails to every step taken by the seller on your website. Rather than spending time looking for merchants, you may invite them to come to you. Learn more about Zurple right now.
21. Resolve Property Management Problems
Valentine Property Holdings’ founder, Chike Uzoka
Any property, whether it’s a multi-unit residential, retail, or commercial complex, is inefficient if it doesn’t have the necessary property management. Good property management firms solve issues as they emerge; outstanding property management companies prevent problems from occurring in the first place.
22. Take a look at Real Estate Crowdfunding
LendingHome’s CEO, Matt Humphrey
There’s never been a better moment to use crowdfunding and marketplace lenders to invest in real estate. As home-flipping activity hits a six-year high, remodeling residential homes for resale may be a profitable prospect.
23. Think about a 1031 Exchange
Realized1031.com CEO David Wieland
Real estate investors may sell investment properties in exchange for a “like-kind” property of equal or higher worth under Section 1031 of the Internal Revenue Code. You could, for example, sell your two-family rental and partner with someone else to invest in a retail center or office building. Sure, this doesn’t seem all that thrilling until you realize that you won’t have to pay any capital gains tax if you use a 1031 exchange.
24. Try House-Hacking & Live for Free
Dana Bull, Realtor, Investor & Real Estate Coach
The primary idea behind [home-hacking] is to buy a house and rent out sections of it to make money and help pay for your living costs. You could buy a two-bedroom apartment and rent out one room, or you could buy a multi-family property and live in one unit while renting out the others. House-hacking is an excellent approach to obtaining expertise with landlords and property management if you’re trying to expand your real estate portfolio.
25. Create a Successful Website
Fit Small Business’s Sales Editor, Allie Potts
Because 80% of prospective renters and investors start their search for commercial real estate online, you’ll need an IDX-enabled website that can collect traffic and turn visitors into leads. Placester is one of the most powerful — and user-friendly — IDX website builders available. With MLS listings, lead capture forms, and more, you can customize each page to your liking. Examine all of Placester’s features and start creating your own site right now.
26. Sell short-sale properties
Sacramento Real Estate Agent Elizabeth Weintraub
When a lender chooses to sell a property for a reduced price in order to pay down an existing mortgage, this is known as a short sale. The majority of the time, lenders seek short sales when the borrower is in default (the last step before foreclosure), but this isn’t always the case. The borrower may be current on their payments yet owing more than the house is worth.
27. Make a short-term rental investment
Rented.com CEO Andrew McConnell
The rental demand for such homes is expanding as tourists increasingly seek “alternative accommodation” choices to hotels. As a result of the increasing demand, there is more occupancy and higher nightly prices. We’ve seen a number of markets with average capitalization rates in the double digits, with particular possibilities considerably beyond that.
28. Increase the number of website leads converted
Owner of GreatCalgaryRealEstate.com, Joe Samson
Attracting leads to your website is generally the most difficult challenge that many people are unable to overcome. However, thanks to the plethora of internet advertising alternatives, you can virtually instantly generate visitors to your landing sites. If you’ve opted to concentrate on growing your digital presence, boosting the number of leads that sign up on your website may help you increase your revenue significantly.
29. Invest in Tax Liens on Real Estate
Michael Trickey, CPA & Author, Founder of Finding Home Books, LLC
Annual auctions of overdue taxes are held by counties. The county slaps a lien on any residence that hasn’t paid its taxes, and during auctions, the liens are sold to investors. Each homeowner has a certain amount of time in which to pay back taxes. During this period, the lien generates interest for the investor. Investors compete by bidding down the rate of interest they are ready to take in an auction, which determines the rate of interest.
30. Find & Purchase Pre-foreclosures
GeoData Plus’s President, Erik Wind
When a borrower defaults on their mortgage payments, a mortgage lender may file a pre-foreclosure, also known as a “lis pendens.” It’s the first public notification that a property is in danger of foreclosure. There are a plethora of listing options available, many of which aren’t even short sales. For an investor, a thorough examination of pre-foreclosures will reveal homes that may be acquired for less than market value.
31. Pay Special Attention to Lease-to-Own Properties
Aspire Canada co-founder Keisha Blair
This is a method to reach out to a new group of renters who would want to purchase one day but aren’t ready to take up a mortgage just yet. These tenants are usually able to pay more than the ordinary renter and can put down a modest deposit. The first step is to come up with a reasonable lease-to-own arrangement for both you and the renter. You still have a higher income if they don’t purchase the home, and if they do, you have an exit plan for the property and may go on to other assets.
32. Build Granny Flats & Rent Them Out
SP3 Realty’s Seth Phillips is a Realtor.
Many states enable landowners to create and rent out a separate housing units on their property. California recently enacted a new Accessory Dwelling Unit (ADU) or Granny Flat legislation, which permits single-family house owners to construct extra rental units for their properties in order to help alleviate the housing shortfall.
33. Use Corporate Housing Rentals as a resource
AvenueWest Corporate Housing’s Founder, Kimberly Smith
This is a massive and mostly untapped source of rental revenue. When opposed to holiday rentals, corporate housing investments may significantly enhance your residential investment returns while also lowering your pain-per-dollar. For relocated or traveling company leaders, corporate housing has evolved into more than simply a necessary business function. Corporate housing has evolved into a full-fledged lodging option for common people who want short-term living with the spaciousness and convenience of a home on the go.
34. Pursue a career as a home inspector
Welmoed Sisson, Licensed Home Inspector & Co-founder, Inspections By Bob
For anybody looking to purchase a house, a good home inspector is like a superhero. Hiring one for a few hundred dollars will save you many hassles and a bag full of cash. It’s also an excellent job for folks who have experience in building and wish to start their own real estate company. Home inspectors may demand premium charges in a growing market.
35. Fix & Flip Houses
Than Merrill, CEO & Founder of FortuneBuilders & Star of A&E’s “Flip This House”
Fixing and flipping properties is a great way to make money in real estate in the short term. To earn money, house flippers look for undervalued properties in need of repair, fix them, and then resell them for a profit.
36. Buy & Sell REO Properties
Danny Johnson, Real Estate Investor & Founder, Flippingjunkie.com
A property that has gone through the foreclosure process and failed to sell at the foreclosure auction is known as a bank-owned or real estate-owned (REO) property. Purchasing REO houses may be less dangerous than purchasing homes at foreclosure auctions in various aspects. When a property is returned to the bank, the lender clears the title of any liens, evicts tenants if necessary, and may even do minor repairs to get the property ready to sell.
Conclusion
Making money in real estate might be difficult, but there are numerous options available to you besides being a real estate agent. These options include putting your own money into rentals, becoming a property manager, or diversifying your portfolio to include a specialist market, such as corporate rents.
Frequently Asked Questions
What is the fastest way to make money in real estate?
To make money in real estate, you need to buy a property and then sell it for higher than what you bought it for.
How do beginners make money in real estate?
There are several ways to make money in real estate. Some options include buying and selling properties, using your expertise in knowledge of a specific area to take advantage of the market, or investing.
What real estate strategy makes the most money?
A diversified portfolio of rental properties is typically the most profitable strategy.
