Whether you want to get involved in real estate for a side income, or whether you want to be a landlord or you want to buy and sell full time as a career option, you can make a whole lot of money buying properties and then either renting them out or selling them for a quick profit. Real estate gives you a whole lot of security, as people always need housing and it can provide you with an income if you find yourself struggling for work elsewhere. If this sounds good to you, let’s take a moment to get to grips with the basics of making money from real estate!
Managing Your Finances
Before you get started in real estate, it’s absolutely essential that you are fully aware of your finances and what you can afford to invest, what you can afford to risk, and what you need to do to make sure you’re paying all legal costs properly. You may want to take an advisor on board when you first start testing the waters, as they will be able to show you the ropes and get you into good habits. You may also find that a series LLC is good for real estate investors.
As we’ve briefly touched upon, there are two common ways to go about real estate. These are buy to sell and buy to let!
Buying to sell is the most straightforward way to get involved in real estate.All you have to do is buy a property at a low price and sell it for a higher price. Your profit comes from the margin between what you forked out and what you’ve received from a buyer. At the moment, people are willing to pay a whole lot of money for a comfortable home and you can provide them with what they want and need!
A second option is buy to let real estate. Rather than making money from a sale, this situation allows you to make money from rent on a monthly basis.If you have taken out a mortgage to purchase the property, rent payments from tenants will eventually clear this mortgage, meaning they’ve paid for it on your behalf but you get to keep it. If you charge a little extra per month, you can have a little extra in your pocket too. If you purchase a property outright, everything that you bring in will be pure profit.
Of course, if you are intending to become a buy to let landlord, you are going to take on a whole lot of responsibility. You are required to make sure that the property is up to scratch when a tenant moves in and that it remains in a good state the whole time they are living there. You can request a deposit to make sure any costs incurred by the tenant themselves, such as damage, can be removed from the deposit.
Making money from real estate is pretty straightforward and simple. You just need to invest wisely and maintain your properties properly!