A single investment in real estate might be just enough for a casual investor or beginner who is testing profit margins. For many adults who invest, there comes a point where earning extra dollars without a lot of work is an attractive business proposal. This list of 5 ways to make extra money in real estate is expected to showcase more profit streams available right now.
Creative Ways to Boost Real Estate Profits
5. Annual Rent Increases
While some rental home owners earn a fixed amount of profits monthly, there are ways that can be used to increase earnings. Someone who is working solo or through a property management company has the option of raising rent prices each year by a certain percentage. A simple raise of $50 monthly would net $600 in the first year. The profits increase when more than one property is owned.
4. Real Estate Notes
There are two ways to acquire notes for homes: Buying on the open market or creating a note for a home buyer. Notes are promissory and do require payments each month like a mortgage. A note can be discounted and sold to another investor or can be held until the payoff is reached. Many beginner investors start out using notes to build capital before buying their own homes.
3. Commission Income
Brokers make their living by introducing a buyer and seller and happily take a commission. By being aware of what homes are available for sale, it can be easy to coordinate a deal between a seller and buyer and profiting through commission or flat fees. Exploring FSBO listings on the MLS is how some people take advantage of commission income through contract sales.
2. Tax Liens
Depending on the state where a lien is held, an investor could receive the deed if back taxes are not paid on a piece of real estate. From land to apartment buildings, tax liens do provide a way to earn income by paying someone else's tax burden and waiting to claim the deed.
1. IRA Investments
Because real estate is a qualified investment product for 401k or IRA accounts, income could grow free of taxation in these accounts when invested in a rental property. Someone who is close to retirement age and is not earning enough from mutual funds, stocks or bonds could find that IRA real estate offers much higher annual returns.
Sale Priced Investment Property
The monthly cash earned through rentals is a big attraction for investors. Homes professionally managed that include an expanded lease agreement are supplied by JWB to clients nationally. To learn more about how to buy investment homes in top markets, download the information guide available.