Property has long been a popular way to make money for people. Though it is not as easy as many of the TV shows make it look, it is perfectly possible to do this. But in today’s world, there are so many ways to make money from property, where do you start?
Property investment
There are many opportunities to get involved with commercial and residential property investment. This is often more suitable for people who don’t have a lot of funds immediately. Essentially, you help fund development, alongside other investors. This development could be a completely new site or the redevelopment of an existing area. The terms of your investment will state how much of a return you can expect when the development is eventually sold, you will receive a return.
This is perfect for those wanting to invest in property but doesn’t have a lot of capital at hand or want something that requires relatively little effort from them after the initial research. Great if you’re working full time.
Flipping
This is probably what you’re most familiar with if you’re a fan of real estate shows on TV. Property flipping involves buying a house below current market value, renovating it, and then selling it at a profit.
Depending on the type of property and its condition, you can do some remedial work to bring it back up to a saleable condition, or go all out and make it a luxury property. It all depends on the realistic value of the property once the improvements are complete.
The profits made from the sale can then be used to fund the next property to flip. Eventually, you could be running multiple property flipping projects at the same time.
In order to be successful at property flipping, you will need to know how to research and recognize opportunities in the housing market. That involves knowing the socio-economic details of the area, future developments, and historic property prices.
You’ll also need a good team around you that includes financial advisers, attorneys, and contractors who you can trust to do the job and give you the best rates.
Rental
It’s an unfortunate reality of today’s society that many people cannot afford to buy their own homes. Good quality rental property and trustworthy landlords are also in short supply. This makes the rental property an attractive investment. You buy a property in an area with a strong rental market, make some improvements to the security, features, and decoration and then rent it out.
With a buy-to-let mortgage, you can expect to make a good profit on rental properties and begin building up your portfolio. Depending on the area you want to buy in, you could concentrate on high-end professional rentals, family housing, or low-income housing.
You can choose to handle everything to do with the property yourself or use a property manager who can deal with all of the admin and day-to-day contact with tenants for you.
Short-term rental
If you live in a city or an area with strong tourism and business, then the chances are that people are looking for short-term rentals in your area, often through sites like Airbnb. Well-located properties are particularly popular with business people and tourists and they will often opt to rent a property rather than a single hotel room.
The rates you can realistically charge mean that you would only need a few nights of occupancy per month just to cover the mortgage. Of course, if you’re fully booked night after night, then you could be making a lot of money from this. Enough to potentially invest in more properties.
You will have to arrange to have the property cleaned and inspected between each rental and ensure that someone is always available to contact in case of an emergency. You can choose the do this yourself or hire a property manager to do it for you.
Property management
If you live in an area with a strong Airbnb market, then property management could be a lucrative career, and you don’t even have to buy property.
Short-term rentals are picking up again following the pandemic. There are many property owners out there who want to rent their rooms or properties, but don’t have the time or the inclination to manage the process themselves.
You approach these people and offer to manage their Airbnb rentals from end-to-end, from putting the listing up on the site to arranging cleaning and being a point of contact for the renters while they are there. All for a percentage. Build up enough rental properties and you could be making a good living from this.
Real estate agent
If real estate is your passion, then becoming a real estate agent or realtor can make a lot of sense. Many people opt to do this part-time or as a ‘side-hustle’ alongside their existing job. Depending on where you live, you will have to undergo specialist training and get your license.
Again, you can choose to specialize in a specific niche and make a name for yourself. It could be luxury property or family homes.
Similarly, you can build a referral network with real estate agents. You find clients who are looking for their dream property, perhaps out of state, and you connect them with real estate agents in that area, taking a referral commission.
Final thoughts
If you really want to get into the property, there are many ways you can go. Your choice will depend on your current financial circumstances and how much time and effort you want to put into it.
Many successful property developers live and breathe real estate, or hire people who do to help them make the right decisions.
As with all investments, there is no guarantee of profit and your money is always at the mercy of the prevailing housing market conditions. But property does tend to rebound fairly quickly after a recession. For many, property has been a way to financial freedom and a new career.
(Disclaimer: This content is a partnered post. This material is provided as news and general information. It should not be construed as an endorsement of any investment service. The opinions expressed are the personal views and experience of the author, and no recommendation is made.)