Pot of Gold: 5 Legit Ways to Build Wealth in Real Estate

Amidst all means of saving and investing, real estate is probably the greatest way to generate passive income and eventually build wealth. Real estate is highly different from buying a stock. In the stock market, there is only one way to make money. That is when the stock increases in value. In real estate, there are tons of ways to make a profit.

But both can be very challenging if you do not know what you are doing. As such, if you think creatively and work hard, making money in real estate will be easy. With real estate you will never run out of ways to make money, to know more check the list below.

Lease with the Option to Purchase

A lease with the option to purchase is one of the best ways to participate in real estate without the need to provide a huge amount of money or even bear a high credit at the beginning. In this approach, you are only leasing with the power to buy.

Lease options work well if and only if the real estate market moves up. Why? It is because you are developing a pre-set financial value so that you can buy the property in the future.

For instance, if the real estate market moves up, you will be able to purchase that property at a discounted price. Also, you can opt to sell your rights for that specific property to someone else. And if you can exercise this option successfully, rest assured that you will turn a profit.

Residential Rentals

Taking advantage of long-term residential rentals is one of the most prevalent ways to turn a profit in real estate. Of course, the society will always find a place to live. As such, it is very advantageous to procure rental properties. However, you need to find the right location to be able to get the most out of your rental properties.

It may seem unimportant, but the location is the key to succeeding in residential rentals. As such, you need to have a down payment on hand, and then you can have that property for the long term. But depending on your situation, you can simply get that property for a low amount of down payment or even without a down payment.

When there is passive cash flow in a residential rental, then most probably it makes an excellent investment. However, it is not an easy task. But if you select the right property and manage it correctly, then you will never have to worry about your income.

Short Sales

Short sales take place when the present owner of the property is behind on their mortgage, but the property has not yet filed for foreclosure. For the short sale to happen, both the seller and buyer should concede to the transaction because the property is worth less than its current mortgages.

With that, short sales are a great way to make money quickly without investing in tedious renovations. Furthermore, short sales are much better than auctions since you will have the chance to examine the property and join into a negotiation process. Except if you are an experienced investor, entering in short sales without examining the place can be risky.

Keep in mind that short sales take so much time, but are worth the wait. The possible return on a short sale property can be pretty quick because banks are on the hunt of bad investments. But depending on how desperate the bank is, the property can sit around for a long time, so do not try to cut the price.

Contract Flipping

Another great way to turn a profit in real estate is through contract flipping. In contract flipping, you do not have to have a credit or a large amount of cash to flip contracts. All you need to do is to look for an agitated seller and a persuading buyer.

Once you have found these parties, it will be much easier for you to enter into a contract with the guarantee that you will not have a hard time to complete and finalize the sale. Also, you need to look for properties that are on short sale. With that said, you can look for vacant or empty houses or properties.

Commercial Real Estate

Investing in a commercial real estate is yet another great opportunity to generate a stable income. Investors in this field do not only concentrate on property-flipping, but also in expanding them. By doing so, they add value to the property and eventually raise their net incomes.

Takeaway

If you want to make money and build your wealth, real estate investing is the way to do it. There are many ways to make money in real estate. From leasing options, residential rentals, short sales, contract flipping, to commercial real estate, you will never run out of ways to turn a profit in real estate.

If you are still in doubt, you can seek advice from any online firms like Rose & Jones. By doing so, you can thoroughly decide where to invest and where to focus.