Two Ways to Earn by Investing in Real Estate

Two Ways to Earn by Investing in Real Estate

Photo by Jared Brashier on Unsplash

Many people are reluctant to enter the real estate business because of the impression that it is too complicated for them and that it requires some sort of capital to start. There is also the idea that you need to work full time in real estate. These misconceptions are not at all true.

Many real estate investors build their portfolios through the years while working a full-time job.  There are two ways of making money in real estate. You can generate income by buying and holding real property and wait for it to appreciate. You can also generate income by flipping contacts which means purchasing a property and selling it after a short period of time for profit.

Real Estate Appreciation

The most common and the easiest way to earn in real estate is to make a profit from the appreciation of the property over time. Real estate increases in value as long as you hold on to it. By the time you decide to sell the property, it has appreciated in value many times over the amount you paid for it.

When you buy an undeveloped piece of land, the best way to increase its value is to develop it. If your land is located outside of city limits, the development will entice developers to purchase your land for development. If you build a house on the piece of land you bought, the more that its value will go up.

When you purchase a residential property, the location will be an important factor for the appreciation of its value. If the area around the house evolves into a commercial or a busy center, the value of your home will go up significantly.

Home improvement can also increase its value. Adding an extra bathroom or an extra bedroom will dramatically increase the value of the property.

Whether you will be selling or will be renting your property, you will generate a good income from it.

Flipping Contracts

Flipping contracts is one sure way to earn money quickly. Many people, however, are reluctant to enter this type of business because of the notion that it requires plenty of capital.

Flipping a real estate contract involves the transfer of your interest in the contract to a third party. You will negotiate a lucrative deal with a seller who will bring you a profit when you bring in a buyer. You need not own real estate in order to flip a contract. You negotiate to flip a contract and then negotiate the sales price and terms with a seller. You will be there when the seller signs the agreement with the buyer. You make your money in the form of a commission or a percentage of the sale.


Photo by on Unsplash

Working in real estate isn’t a walk in the park, but if you take time to study its ins and outs when you start out, all the effort and hard work will pay off in the end.

To help you along, you can have your properties listed on Swoop. Just download Swoop on the App Store or Google Play. You can also send an inquiry on our Facebook page or website.

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