4 Real Ways to Make Money in Real Estate in 2021
Real estate is a viable investment opportunity for millions of people, particularly as you don’t need a large amount of capital to begin making a profit. With numerous different ways to invest in property, you can find endless ways to generate revenue or build capital using real estate. If you want to expand your investment portfolio, take a look at these four real ways to make money in real estate in 2021:
Lease a property
When you lease a property, you can retain the right to purchase it at a pre-agreed price. This means you can secure a future right to buy a property with relatively little outlay. Furthermore, you can see how the property market grows (or declines) before you decide whether to act upon your right to purchase the property. In addition to this, you can sell your rights to a leaseholder to another individual or company, which could allow you to cover your initial investment and make a profit.
For as long as you own (or part-own) the properties, you can generate rental income from them and, if you decide to sell in the future, you can potentially benefit from capital growth too.
However, if you decide to develop a property in this way – whether that be for rental or commercial properties, you are under an obligation to ensure that the property is well maintained and cared for. While this obligation may seem straightforward – many different tasks fall under the name of property maintenance that you may not initially imagine. For example, this could include duties such as cleaning out gutters and following health and safety procedures by carrying out routine testing in items such as smoke and carbon monoxide detectors.
If your property is within an area that is known for being home to certain animals, such as bats, then you will also have to arrange for a bat surveyor to visit the property. They can complete routine tests such as preliminary roost assessments and scoping bat surveys. Essentially, they will be able to search out for signs and signals that indicate that bats have interfered with the property. For example, they have been known to nest and roost within gutters, garages, and attics. By following Arbtech’s 2021 bat survey guide for developers, you’ll be able to put your foot forward when it comes to property maintenance – ensuring that all of your developments are ready for tenants to move in.
Buying a property and renting it out to tenants is an effective way to invest in real estate but building a property with the aim of renting it out can be even more lucrative. With build-to-rent investing, you purchase land and finance the development of properties before renting them out on completion. If you don’t have the funds to do this alone, you can pool your resources with other investors to get construction underway. For as long as you own (or part-own) the properties, you can generate rental income from them and, if you decide to sell in the future, you can potentially benefit from capital growth too.
Real Estate Investment Trusts
A real estate investment trust (REIT) allows you to invest in the property market without actually owning any property. Instead, you’ll invest in the construction of property developments alongside other investors and receive your return as dividends. While you can join a private investment group to do this, there are also publicly funded REITs you can invest in.
Buying or leasing property in a popular tourist location gives you a great opportunity to make money with vacation rentals. Once you’ve renovated the properties or established your business, vacation rentals can generate passive income, which makes them an ideal choice for an investor who is short on time. If you want to generate income without having a hands-on role, you can even appoint a vacation rental manager or supervisor to deal with bookings, queries, marketing, etc.
Start Investing in Property
Although the property is an alternative investment, many people consider it to be low risk. Although you’re never guaranteed high returns, real estate can present a lucrative investment opportunity. With the potential to generate capital growth and/or rental income, real estate can be a great way to finance your future.
Given the range of investment opportunities, it’s important to undertake your own research. By doing so, you can find an investment that’s perfectly suited to your needs.
What to look for in an investment property
If you’ve decided to invest in real estate in 2021, it’s essential to go into a property search with a clear idea of the kind of property you want to purchase and how you’re going to use it to generate an income. Location is key for buyers looking for homes to lease, as well as those searching for a property to hire out as a vacation home. Proximity to attractions, beaches, national parks and areas of interest will always make vacation houses more appealing while being close to transport links, amenities and good schools is important for families looking for a house to call home. This page has more information about properties that will entice tenants looking for a home or a vacation rental. It’s always beneficial to have a target buyer or tenant in mind when narrowing down search options and choosing which property to add to your portfolio.