Evaluate Ways to Profit from Real Estate Investments

“Real estate has produced more wealth than any other industry in the history of time” (Adams, 2017, para.1). What most people don’t realize is you do need to have significant capital, good credit, or even major assets to make money within real estate. My brother buys real estate all the time through sheriff sales and home auctions then turn them into beautiful spaces to rent them out. Throughout this paper we will be discussing more way to realize profits from real estate investments.

Most of us would think that if we purchased a piece of real estate, then all our troubles would disappear, but that is rather far from the truth. In fact, buying and investing in real estate can be a huge headache and cause financial loss if you really don’t know what your doing.

The first method is rental properties because everyone needs a roof over their head and a place to call home. “You need to do the proper amount of due diligence to source your property by keeping three principles in your mind: location, location, location” (Adams, 2017, para.14).

Rental property is always a good investment if the location of one’s property is in an area that is appealing to those who may be interested in renting that property and screening of that possible tenant to be a good fit. For example, screening/background checks would help in determining what someone’s credit looks like and if they are someone that pays their bills. Before renting by doing this it can save a lot of time and extra fees for a property owner in having to take someone to court for non-rental payments. This will help make your decision a lot easier in deciding on who your tenant will be. If buying a property with cash or get a low payment mortgage, then the rental will pay for itself in the long run.

Vacation rentals method can be an extremely profitable investment especially in a popular area with lots of tourists. The greater the need, the bigger the demand. With vacation rentals not only can you charge more than a normal rental, but during certain peeks of the season you can charge a little more because of the tourist that maybe visiting that area. When having vacation rentals, it’s very important to share resources with others through networking and connecting with others who may have already been successful in having vacation rentals.

The third method it through fixer uppers or home renovations. I am a huge HGTV fan and I watch a lot fixer upper show. In today’s housing market many people are doing this very thing all the time, buying houses very cheap and then flipping the house and placing it on the market for resale. When buying a property to flip and resale it can come with lots of issues that you may not be able to see on the exterior of the property. You may end up having to put more money out than you may wanted to put into the property just to bring it up to code, however there are profits to be made through doing this, but you must be careful because it may end up costing you more than you may have paid for the property in itself and if you don’t funds on hand to complete those renovations, then it could take one much longer to having the property finishes and placed on the market.

The forth method is with commercial real estate. Commercial real estate is a great investment and money maker. From small business owners to larger corporations, these companies need to have a place to operate out of so commercial real estate developers are always so focused on developing them and to adding value to be able to increase profits and income. Most commercial real estate is space that is being offered as working office space or can be used for other thing such as galleries for small shops.

The fifth method is called house hacking and personally, I never heard the term before until now. But when I think of this term I think of renting rooms and sharing certain living space to help off set the cost of housing expenses. Me personally I would never do this kind of thing with anyone I do not know, because you never know who you maybe inviting into your space and this can really turn out to more harmful than helpful.

The last and final method I will discuss is short sales. “A short sale is when a lender decides to sell a home for a discounted price to release an existing mortgage” (L'Eplattenier, 2017, para.54). One thing about short sales is that they can be very risky because there maybe some issues with the deed or title due to delinquencies on mortgage payment or even the taxes. What I do know is that most short sales are a fast way of getting rid of a property that maybe facing foreclosure. Some people may choose this route as a quick way to purchase a property, but I would never want to take this kind of risk not knowing what the real issues are with this kind of property.

Most short sales have to be paid upfront in a cash sale. It is said that you should go to an auction for a short sale, that way you can see the property you want to buy. A short sale is a long drawn out process, but the investment benefits can be worth the wait.

In conclusion, there are so many other ways to get involved in real estate. Some ways you won’t need a lot of money down, but others you will have to pay out cash to purchase. If you do extensive research before jumping in, owning real estate can be quite lucrative.

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