How Real Estate Can Make You Money
Everyone likes to have a little extra cash here and there, but what if you could make a career out of buying and selling properties with ease? Experts agree that real estate investments are one of the best ways to make money, and there are several ways you can make it work to your advantage.
There’s a reason that home renovation and “house flipper” television programs are some of the most popular to watch these days. These contractors know the secrets to buying a property for profit, and these tips below will let you in on those secrets as well.
House “flipping.” One of the most obvious choices when choosing to get into real estate is to learn how to flip houses. Using short-term capital like a hard money loan, you can purchase foreclosed homes for cheap, and then use the extra money from investors to remodel the home fit to resell at a large profit. Just a few bits of “facework” on a sturdy built home can increase the value by twice to three times your investment, especially if you can find a great area. You’ll want to use a hard money lender because buying a property for such a short time doesn’t make sense for a traditional loan, and you’ll be able to pay it off quickly with the profit of the sale.
Apartment leasing. If you can find a larger property, even one that wasn’t initially meant for residential use, you may be able to divide units in your remodel into apartments. Rentals are one of the best ways to way to make money simply because you can charge more for renting to several families or individuals than you would for a single family in a home. This also applies to homes that you can divide into duplex apartments, or rent to singles.
Renting to businesses. Many small businesses do not need an entire building for their workspace and may be looking to rent just a few offices or a floor in your building. Rent for businesses is often higher, and they can be very reliable tenants.
There may be some tax benefits. Depending on your country tax laws, you may be able to deduct some of the mortgage interest from the rental income or deduct some of the improvement costs from the rental income as well.
Refinancing after improvements increase the resale value of your property. If you are trying to find cash to put into your next project, consider adding some improvements to the property. If you purchase the property at a low cost and then add renovations that increase the value, a refinance may earn you some cash back to invest in your next property.