Making Money from Real Estate: Methods for Entrepreneurs


There is plenty of money to be made from properties. In fact, 33 billionaires who landed in the Forbes Fortune 400 list made their fortunes through real estate. For entrepreneurs aiming to make their mark and write their financial success story, diving into real estate is a pretty solid avenue for achieving your goals. So, what methods can you, as an entrepreneur, make money from buying, renting or investing in properties?

Residential Rentals

One of the more established methods for entrepreneurs to make money off of properties is to invest in long-term residential rentals. In the U.S., over 100 million people rent their homes, based on data from the U.S, Census. That means there are a lot of people generating regular passive income as the owners of properties they’re currently renting out. Depending on the location and the type (townhouse, house and lot, condominium), the money you can earn can be anywhere from several hundreds of dollars per month or even leaning toward the thousands.

Mortgage Note Investments

If you’re not aiming to start up a hard property investment portfolio (physical properties), you can always go the path of mortgage note investments. Private lending firms are always looking for investors to provide capital in return for equity to existing and seasoned mortgages. As there are various forms of housing loans that are taken out, you can have the luxury of choosing which mortgage notes you’d like to invest in. Notes often go on the market for 30% less their face value, so you won’t be needing as much capital as you’d need for physical property.

House Flipping

Popular shows like “Flip or Flop” and “Masters of Flip” emphasize that there is money to be made in flipping houses. Flipping generally refers to buying a property, increasing its value through repairs or renovations, and ultimately finding a buyer for it. It’s a lot like trading in stocks where you buy low and sell high. Flipping a house has an average profit margin of 15%, according to Tony Guerra of Home Guides. So it’s a particularly good option if you have the capital to buy houses at less than market value and can do most of the repairs yourself. At the very least, you should have a working relationship with repair companies who can assist in the process.

Real estate will continue to remain a tool for entrepreneurs to make their money. If you’re thinking of joining the ranks of property entrepreneurs, make sure that you always do due diligence before making the leap. All that planning can help lead you toward potentially adding your name to the list of established property moguls.

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