Real estate investments have turned more people into millionaires than anything else. Most people are already aware of the profit potential of real estate, but few of them possess the knowledge to make it happen for themselves.
There are two formulas to make money with real estate. First, you can purchase a property, fix it up and resell it for a profit. This is a popular real estate investment method where investors obtain a house or apartment at a low price because it has repairs that need to be done. After the investor purchases the property, they make the necessary repairs and then sell the property at a much greater price which covers all their previous expenses and gives them a substantial profit.
Alternatively, an investor may not want to resell their property after they fix it up. Instead, they may rent out the property to tenants and collect a monthly rental payment from them. This could be a lucrative long-term investment plan because it generates a passive income for the investor. But their investment strategizing doesn’t have to end there.
Below are four ways to increase your profit potential by either reselling your home or renting it out.
1) Buy at Public Auctions – There are bank foreclosure auctions and tax foreclosure auctions that take place frequently in cities and counties all across the country. If you do your research carefully, you may be able to purchase a house or condo unit at a low price. Once you get the property, clear the title, fix it up, and resell for a profit.
2) FSBO – It is better to list your property for sale as a “for sale by owner” listing. Do not use a realtor because you’ll need to pay them about 3% commission if you sell the property. You can do your own marketing and home showings without their help. Then just use a title company to process the paperwork when you find a buyer.
3) Obtain Seller Financing – If you have a bad credit score and cannot get approved for a home loan, then try requesting a seller financing deal from the owner. The homeowner becomes the bank in this situation and you make monthly mortgage payments to them in exchange for use and ownership of the property.
A contract will be used to outline the terms of the deal. Then what you can do is rent out the house to a tenant and apply their monthly rental payments to your monthly mortgage payments. You would basically get the seller-financed loan paid off by using the rental money from your tenant to make the payments.
4) Invest with Equity – If you already own an existing home, then you can take out an equity loan on the property and use it to buy another home. Then just rent out the second home and apply the rental payments toward your equity loan payments. After a while, you can take out an equity loan on the second home and use that to purchase a third home. Then you would turn that into a rental property and keep the trend going. Eventually, you’ll have a collection of houses that you can sell when you’re ready to retire.