Real estate is one of the most lucrative investment assets and way to make. Money Many countries around the world are experiencing strong housing markets, with prices continuing to rise steadily in recent years. The average home price, which stood at $407,100 in August 2023, has seen a significant climb, reaching $419,200 by the fourth quarter of 2024.
Moreover, there has been a notable surge in home prices across several key cities, with Richmond experiencing a remarkable 7.1% surge, followed by Cincinnati at 5.6%, San Diego at 3.3%, and Los Angeles at 1.6%. These substantial rises contributed to a 4.5% overall growth in the US housing market between the fourth quarters of 2023 and 2024.
While there are a number of highly profitable hands-on careers in the real estate sector, there are also other, less involved ways you can enter the field. Real estate income is one of the most classic passive income ideas. People who have spent their entire lives in this line of work have developed their own niches and specialties that allow them to stay ahead of the market. If you are an amateur land investor or real estate agent who are just starting out, we have listed a few overlooked corners of real estate property that will surely help you in broadening your horizons.
7 Ways to Make Money From Real Estate
The housing market in the US has significantly grown, with the combined value of residential properties reaching $49.7 trillion by the end of 2024. This marks an almost $2.5 trillion increase from the previous year.
This rise in real estate properties has also stoked worries and many have begun speculating if the US real estate bubble is about to burst just like it did in 2008. However, this is not the case, as unlike the pre-2008 period, the lending practices have become much stricter nowadays with stronger oversight from financial institutions. While interest rates have increased up to an average of 6.67%, they still remain manageable for many buyers.
So, now are you wondering how to make money in the real estate market? Here are 7 tactics that will help you to make money off your land.
1. Invest in Real Estate Investment Trusts (REITs):
Not a lot of people are familiar with the concept of the Real Estate Investment Trust, but this can be a great source real estate income. In fact, the top 3 global REITs are US-based. Basically, They are practical platforms and organizations where you can put your money in real estate properties. It is more like a group of investors joining together and funding properties. If you are buying a property to give on rent, then the monthly rent is divided between investors. Or if you are selling a place then the same rule goes for the overall profit. The sole purpose of such investments is to acquire income-producing assets.
Different REIT platforms let you start with minimal funding as well. If you are a beginner, it is suggested to get experience by opting for a role in Real Estate Investment Trust. If you have some know-how of real estate, you can even start with your limited capital. The investors together can make a more professional decision about the properties than you working alone.
Read More: Assets to Buy in your 20s
2. Rent Out Your Residential or Commercial Property
Residential rentals remain one of the most rewarding ways to make your first bucket of gold in real estate, even with today’s high-interest environment. While borrowing costs have increased, the demand for rentals is still higher, all because of the rising home prices and tighter supply in the buying market. Simply put, you can command competitive rates, which are usually enough to offset mortgage payments and still generate a steady income. Moreover, you have the chance to buy vacation rentals. We all know how travel has been saving the economy for the past few years. Even some of the hidden places that we didn’t even know about are generating revenue through travelers.
But it is important to search before you buy and rent out the property. It is for both residential and commercial cases like renting an office or a retail space. You should choose tenants that can pay the rent on time so do proper research before you rent it. Here, location is quite a significant factor that increases the rental value of your real estate property. Make sure to rent it out to a long-term tenant to avoid stress.
3. Refinance Your Mortgage to Make Money in Real Estate
You do not have to reach out to other investment opportunities when you can refinance your mortgage. Even though interest rates aren’t as low as they used to be, this can still be a smart move. While you may think that this plan is going to take more time, a lot of investors are using this strategy to access cash and grow their portfolios. Through refinancing your mortgage, you can pay the monthly payments easily and use the extra funds to pay other loans. Or you can redecorate your property before renting. It will increase the rental value of your property and attract more consumers.
You can also get a house or building inspection done to ensure everything is perfect. It helps you get an idea of the problems and you can timely sort them out to sell your property for a good profits.
4. Invest in Houses Flipping to Earn Income in Real Estate
House Flipping is a term that not everyone knows. It is a special investment in real estate where an investor buys the property, fixes it and then sells at a good profit. In 2024, the average profit earned from house flipping was $122,500. Although that is slightly lower than the all-time high in 2021, it is a strong opportunity to gain a solid ROI.
Investors are always looking out for such properties to re-sell them at a good margin. Now, this may look easy but it takes a lot of effort as you have to do everything on your own. There is a lot of damage to be fixed in these properties and hence, all the responsibility is on you.
However, you should have a real sense of the local market and the residential areas to get the most out of this tip. Giving a makeover to the property will help you to attract buyers and you can easily sell them out. The best thing is that the quality of your work will help you sell it fast. There can be some investors or a family that might buy it before you complete the renovation.
Now, purchasing flip houses seems like a great idea but there are some factors to consider. You need to make sure that you have a broad budget, ready for all the fixing and renovation charges and time. Time here is one of the biggest factors because if you don’t have the time you might not be giving much effort into it. You cannot leave the work to people you hired for help. This project can get complicated incase you don’t have relevant experience, hence it is highly suggested to get some expert advice from a real estate entrepreneur near you.
5. Use Mutual Funds or EFTs to Invest in Real Estate Property
A lot of people invest in mutual or exchange-traded funds in their lives. You can invest or use those in real estate. These funds associate with custom home builders, property developers, top real estate firms, and mortgage lenders. This way, you can enter the real estate market without even buying the physical property. Both these types of funds provide a high level of liquidity. which means you have the flexibility to buy and share the funds as you will. And with the right knowledge, you can use them for vacations, real estate, and even for your expensive medical bills.
6. Invest in Real Estate Pocket Listings to Earn Money
Pocket listings, also known as off-market listings, are exclusive properties that are not advertised publicly. You will not find them on Multiple Listing Service (MLS), as they are meant to be kept secret. Instead, they are shared privately among a specific network of real estate agents, possibly through word-of-mouth. As a result, only well-connected buyers and investors have access to them.
Another fun fact about the pocket listing is that the real estate agent here gets a full commission Unlike the traditional way where there is an agreement involving brokers and agents, the pocket listing does not require any type of agreement.
7. Lease-to-Own Property Investment
When it comes to the lease-to-own strategy, you have to rent out your property with an option for the tenant to purchase it after a specific duration. This approach lets you generate a significant income from rentals while avoiding the uncertainty of securing a future sale.
The tenant will pay you an upfront option fee and sign an agreement to purchase the property afterward. It is non-refundable. So, even if the tenant does not buy, you can still keep the fees with you. At present, the global rent-to-own market is sized at $93514.2, with a potential growth of 5% until 2031.
A few benefits of pocket listing include:
- You have more privacy as you are entitled to sell the place on your terms.
- Keeping a low profile on the property means you can connect to high-profile buyers. For example, a politician or celebrity won’t buy a property that anyone can easily buy. They like to keep their home information private and you can sell your hot property there.
- If a property is listed on the MLS for too long, it can raise red flags for buyers. They may assume there is some issue with the home. You can avoid this with pocket listings by marketing your property privately.
- You have the chance to test the market in your way. You can see if there is a chance of getting more interest in your property. Maybe some people can leave offers that are more than your expectations. It is a great tactic to fill your pockets fast with real estate property.
Common Ways to Sell Your Property and Generate Revenue
A large number of homeowners turn to property sales as a reliable way to generate income. Here, we will explore a few simple and effective methods to do so:
- You can quickly sell your property at a good margin by selling it to an investor, developer, or auction.
- Hire yourself an agent that can do all the legal and marketing work for you.
- Before you start listing your property, make a rough timeline of when you will reduce your price a little. A lot of properties stay on listing for a long time and if you don’t want that then set a timeline.
- If you want to fill your pockets then you have to sometimes put sweet incentives in front of the potential buyers. You can add the appliances, maybe some furniture, or anything that might interest the buyer.
- Do all the repairs before putting property out for sale. A lot of buyers and investors do inspections before they purchase any sort of property either residential or commercial. Make sure you are putting out a good impression that will upgrade the value of your real estate property.
- A lot of people when selling their homes or offices hire stagers. It is a common tactic in the world of real estate to show the buyers how the place will look. The best part is that a lot of potential buyers show interest when they see a furnished place. The job of the stager is to decorate every room creatively so the buyers can feel welcome.
Final Word
Buying, managing, and selling your real estate property is not easy. This is why people, real estate agents, or brokers want to know the tactics that can multiply their efforts. Above are 7 lesser-known ways that will bring value to your home and allow you to earn fast. You can choose any of them according to the benefit you seek. But, make sure that your long-term investments can reap good profits.
Also, if you are selling your home then make sure you have a good real estate agent. Historically, 90% of people use a real estate agent to sell their homes. Moreover, online pictures of your property speak louder than the marketing skills of your agent. According to a survey, photos are considered one of the most valuable types of real estate content on the internet, followed by detailed property information and floor plans. Also, there are many open house ideas for realtors which can also help them find potential buyers. So, make sure you follow every tactic above to ensure you are getting a good value for your property.
