1. Look Into the Future
One of the simplest ways you can invest in real estate is to buy acres of land near growing cities. If you hear of the city putting together plans for a new loop or improvements to an existing highway, this is a good indicator of where the people will be going in the future. You may have to wait many years for the pay off, but it can be substantial.
2. Become a Developer
You become a developer by buying a large piece of land and dividing it into lots for individual sale. For example, say you purchase 10 acres of land at $100,000. Divide the land into 1/3-acre lots, and sell them for $10,000 per lot, for a total of $300,000. Of course, you will need to spend time and money developing the land into a place people want to live, so you will not make a $200,000 profit. You must make sure utilities and streets are added to the land. Usually, a developer works with home or commercial builders or is a builder himself.
3. Buy Real Estate and Rent it Out
You can purchase individual homes, commercial buildings, condominiums, apartments and other buildings with the goal of renting the space. The quality of the building and location will determine what you can charge, and they will also determine what you have to pay for the property. You must factor in home repairs, loans, taxes and profit to set a rental price. In addition, consider the time involved in handling landlord duties.
4. Flip a House
Some people try to buy a house at a low price, make repairs to it and then sell it for a profit. You can make money flipping a house, but you must watch where every dollar goes for materials, labor, utilities, travel to the job site and interest on the loan. You can use a construction loan or an interest-only loan for the repairs to get a reduced monthly payment until the home sells. Make sure you fully understand the changes you will make to the property and the associated costs, the potential value of the home as compared to others in the neighborhood, realtor fees, the cost of the loan and the profit you plan to make before you start the house flipping process.
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