Top 3 Hacks to Earn Extra Money By Investing in Real Estate
Today’s economy is tough for the average person: inflation is out of control, wages are stagnant, and it seems like there’s a new threat to the workforce every single day. For many people, one full-time job doesn’t cut it anymore, leading more Americans to turn to side hustles so they can make ends meet. However, many of these second or third jobs can be complicated, and they may not make anywhere near enough money to be worthwhile; they might even prove a money sink, such as multi-level marketing.
But there’s a better way to make extra money and secure your future: real estate investing. This is the gold standard of investments, trusted by millionaires and billionaires the world over, because it’s more stable than the stock market and holds its value over time. Even during residential housing bubbles, there are still many other ways to get involved in the real estate market, all of which can prove invaluable to the right investor.
It can be intimidating to get into real estate investing, though, as you might believe you need thousands of dollars to even think about purchasing a property. However, this is something you can build up to over time, as you develop greater knowledge of the market and begin to generate revenue from your properties. While you’re learning about concepts such as the BRRRR Method for how to make a great profit on a so-so home, you can develop some exposure to the marketplace by trying these three proven hacks.
Number One: Buy Into a REIT
This is the way that many people have gotten started in real estate, because it’s low risk and low cost, but it still starts to build your portfolio and help you understand the underpinnings of real estate investing. In short, a REIT is the real estate equivalent of the stock market: you buy shares in a property, which helps the property owner generate the funds to develop their project. These are usually for commercial properties like hotels, shopping centers, and apartment complexes rather than individual homes. It’s an excellent option for those just starting to learn about real estate investing and, though the income generated is lower than for other options, it also has a lower barrier to entry, meaning you can start making money quickly.
Number Two: Jump Into the Tiny House Craze With Small Rental Properties
If you’ve got a bit of land and you want to make it work for you, consider turning it into a profit-generating vacation paradise by building small homes that can be used as vacation rentals. Many people are fascinated by the tiny house movement, but they’re not quite ready to commit to living in one full-time; that means that tiny houses and small cabins are excellent vacation properties to build. Depending on your construction know-how and interests, you can build one of these for under $60,000, much of which could be financed with a business loan or a construction mortgage depending on price. There are a number of models and builders to choose from depending on your needs: you could go with a rustic timber cabin in the woods, or a chic beach shack if you’re near the coast. By advertising and maintaining a great reputation, you can generate a remarkable amount of income for a relatively low upfront investment.
Number Three: Create a Portfolio of Commercial Rental Properties
Commercial rentals, though usually a little pricier, also have a faster return on investment and will generate higher income for longer periods of time. Businesses usually have longer leases - anywhere between three to five years - and you can command higher prices than you could with an individual family because it’s assumed that they will have a more stable income.
One commercial property can easily become more, as you utilize the money generated from one property to purchase another and so on. It’s important to note, though, that you will be responsible for any repairs and maintenance to the property, so you should always maintain a liquid cash flow that can assist your tenants should there be emergencies. The business community is often tight knit, and if you gain a reputation as a great landlord who is responsive to issues, it’s likely that you will have a steady stream of clients for all of your available businesses.
It’s intimidating to become a real estate investor, but there are opportunities for everyone, regardless of their income level or experience in real estate. From investing in shares of property to becoming a commercial landlord, you have numerous options for how to gain financial freedom and improve your life for years to come. Utilize these proven avenues to success, and you’ll find yourself with a healthy portfolio of great properties generating income for you.