Secret Ways to Make Money in Real Estate – Part #2
March 26, 2007
Posted in: Real Estate Investing
In my last post of secret ways to make money in real estate we talked about a variety of ways to make money in real estate which most people are not aware of. This post is part #2 of the series and I will discuss a couple additional methods that you could potentially use in your real estate investing strategy.
Now these methods are are more suited for seasoned investors that have a good understanding of how real estate investing works. I’d recommend getting a few properties and at least three years of real estate investing under your belt before considering these options.
- Property Management – once you learn to manage rental properties, you can do it for other people. Property managers charge anywhere from 5% to 12% of the gross rents, plus various fees. Essentially you would need to hire a team of people to work for you to take care of the day-to-day work while you oversee the business.
- Become a Real Estate Agent – real estate agents earn commissions from helping people buy and sell real estate property. There are advantages to being an agent such as access to real estate listing services, the ability to run comparable sales analysis, and the networking capabilities to work with other real estate agents. There are however a lot of disadvantages such as long contracts, licensing requirements, fees, and lots of regulations. To me it’s just not worth it although you might feel otherwise.
- Consulting – once you’ve been in the real estate business for a couple of years, people tend to ask you for advice. As a consultant, you can charge an hourly rate or percentage of the profits if you help with the deal. This does not work well with close friends and is better suited for somebody you don’t know that well.
- Developing Land – some people I know end up just buying land and sitting on it for a couple years. Others may buy land and get it zoned for potential homes to be built on it. If you’re able to buy land by the acre and sell it by the lot you’re going to make a lot of money. Real estate developers follow this method and come out quite well.
So what kind of properties should you invest in? If you’re new to real estate investing I recommend first purchasing a duplex or four-plex just to get your feet wet. I started with a single-family home and later regretted it. You might need to invest in a different state such as New Mexico or Indiana in order to find your price point and that’s exactly what I had to do since California is way too expensive.
Return to: Secret Ways to Make Money in Real Estate – Part #2