How Real Estate Can Make You Extra Income
When it comes to taking on another property, whether it’s a rental or a flip, the big question that follows usually has something to do with finding an extra source of income. Do I have enough income to retire? Will I have the time to finish the project or maintain a property? Do I have the energy and knowledge to create and work for any extra money?
According to R. L. Adams, a contributor writer on entrepreneur.com, real estate is one of the best industry’s to pursue if you want to make extra income. While real estate may seem intimidating to some, when you have the right knowledge and education along with a strong team standing behind you, it becomes all about the effort you put into building your database. Not only is real estate a viable career, it’s a valuable investment.
Investing in real estate, when the proper time and effort is put into it, can be a strong extra source of income. There are multiple ways to utilize real estate as an investment such as renting out a property, flipping and selling, or buying cheap land and developing.
REMEMBER: Don’t get ahead of yourself. Depending on your experience with real estate and the housing market, it’s better to consider starting small. Some of the smaller options that would make great choices would be a small apartment building of max four units or a single family home. Both of these options offer good investment opportunities depending on the kind of responsibility you’re willing to accept. If you’re looking for something that requires less maintenance but still brings in a profit, the single family home would be best. However, if you’re willing to put up with a slightly more cleaning and being a landlord, than the multiple unit apartment building would be a better fit and has the potential for bringing in a bigger profit.
Location, Location, Location. Whether you’re planning on managing the property yourself, considering the inflation or deflation of a neighborhood or looking for a hot real estate market, taking location into account is the first priority. This is when having or being a savvy and trusted realtor comes in handy with helping to determine what your goals are and what your comfort level is, and then help you find the right area and property for you. There are risks with wherever you’re looking to establish a property, so nailing the location can either make or break your ROI.
Don’t get stuck with horrible tenants. Nothing can ruin a property more than having a bad tenant. As a new landlord, it’s important to know the proper steps to take when screening a potential tenant. Proper screening will include credit and criminal background checks and referrals from past rental property owners. The Fair Housing Act and local and state regulations also must be considered when setting selection criteria. Screening your tenant may be a tedious task, but it’s required in order to ensure not only the safety of your property, but legal protection for yourself and the tenant.
Know the benefit of a fixer upper. When it comes to real estate, it’s all about land and location. Finding the ugliest house in the best looking neighborhoods will bring a larger profit due to location demand such as school districts, restaurants and entertainment, growing neighborhood value, etc. The key to having a successful fixer upper is developing strong relationships with quality contractors and crews. Whether in the end you’re living in or flipping the house, a successful realtor is crucial. This is for both buying a fixer upper for the cheapest price and selling the fixed-up flip for the highest offer.
While real estate investments do offer the opportunity to make significant profits, they’re not something you can just push the off button on or ignore. Before taking the leap to buy and rent property or even make it a profession, make sure to look at all the potentials, both negative and positive.