Which Real Estate Makes the Most Money?
A Comprehensive Guide to Real Estate Market Analysis
November 13, 2023
10 Benefits and Drawbacks of Real Estate Investing
November 15, 2023
Thinking about investing in real estate? Wondering how much money you can make as a real estate investor?
Well, real estate investors usually earn between $70,000 to $124,000 on average. But the amount you make depends on what kind of investing you do, how much time you spend on it, and how many deals you take on each year.
A lot of people in the U.S. think that investing in real estate is a great way to grow your personal wealth. In a recent survey by CNBC Make It: Your Money, 23% of adults said that investing in real estate is an effective way to build wealth. That makes it the most popular way to build wealth, beating out investing in stocks (16%), starting your own business (15%), and getting a second job or side hustle (12%).
So, how much money can you make through real estate investment? And which types of real estate can make you the most money? Let’s explore five real estate investing types that could become a good job and give you a strong profit.
Interested in investing in Real Estate? Download the Android or IOS app and we are happy to assist you in finding the most profitable Real Estate options
Residential Real Estate
Houses you can rent out are called residential real estate. The most common type is a single-family home.
Other examples are homes with multiple families, vacation homes, and duplexes. Many investors like residential real estate because it’s usually easier to make money regularly.
But, there are many ways to invest in residential real estate, and the competition can differ in various places. What’s suitable for one investor might be better for you. So, it’s essential to pick the right plan and place to be successful.
Here are some standard plans people use in residential real estate:
- Rehabbing: Fixing up a property to make it better.
- Wholesaling: A quick way for investors to make money in real estate.
- Buying and holding properties: Keeping a property to make money from renting it out.
If you do residential real estate right, you can make much money. You get regular cash and tax breaks that can help you save money.
Residential Rental Properties
Investing in rental homes is like a safe path. It’s a simple way to make money because you collect rent every month from people who live in your property. But, you need to know and be ready for some problems that might happen.
Right now, it’s harder for people to buy homes because the interest rates are higher. So, renting out homes is a good idea for investors or landlords like you.
When you invest in rental homes, you get money regularly. But, you also need to take care of the home so it stays valuable. Sometimes, tenants might not pay rent on time or at all. And, you might not be able to find people to rent your home for some time. These things can make it hard to make as much money.
If you’re ready to deal with these problems, investing in rental homes can give you a good profit. If you decide to sell your rental home, you can make money from the sale.
To make the most money, choose a place where the value of homes is going up. Other things to think about are:
Homes getting more valuable over time.
Tax benefits you can get.
If fixing up the home before selling is worth the cost.
Commercial Real Estate
Commercial real estate is another way to invest. You can invest in offices, stores, warehouses, apartments, or hotels. This type of investing can be suitable if you want to improve your community.
Commercial properties are considered the best because they can make you more money. If you invest in a commercial property, you might get:
More money
Longer times when people rent
Less time when no one is renting compared to other types of properties
With commercial real estate, you’re renting to a business, not a person. This makes everything easier because companies care a lot about their place’s appearance. This means they usually take good care of the property.
Another good thing about commercial properties is that businesses usually pay rent on time because they want to maintain their space.
Real Estate Investment Trusts (REITs)
Real Estate trusts or REITs, are like companies that own different types of commercial places. They own things like:
- Shops
- Hotels
- Offices
- Restaurants
- Malls
You can buy a part of these companies on the stock exchange. When you do that, it’s like you own a little piece of all the places these companies have. This is good because you don’t have to worry about taking care of the places like you would if you owned them.
A rule for these REIT companies is that they have to give back 90 percent of the money they make to the people who own parts of the company. This is cool because it means you get some money back, and it’s a way to have different kinds of investments.
If you need money in a hurry, you can sell your part of the company on the stock exchange. It’s a bit like having a piggy bank you can open whenever you need some coins.
Crowdfunding Platforms
Investing in real estate through crowdfunding can make you a good amount of money. This is because on these special websites, you can join with other people to invest in different things that can give back a lot of money. Usually, this kind of investing is popular with people who have a lot of money.
But, there’s a downside to it. Even though you might make a lot of money, there’s also a big chance you could lose some. These websites usually only let people with a lot of money join. Some sites, though, allow regular people to join too.
The main things you can invest in on these websites are REITs. These are like pieces of different real estate places, but they are not sold on the stock market.
If you decide to invest this way, your money could be stuck for a few years. This means you can’t take it out when you want to. It’s a bit like putting your money in a piggy bank that you can’t open until later.
Finding the Right Real Estate Investment for You.
Deciding which type of real estate to invest in depends on a few important things:
- Your situation
- What you want to achieve
- The place where you want to invest
- How you like to invest
Picking the best kind of property to invest in is a personal choice. It depends on how quickly you want to make a lot of money and how much money you have to invest.
Before you decide, it’s important to learn a lot about the area and the property you’re interested in. This way, you can figure out if the place has the potential to grow and make more money in the future.
Belwood Investments are the Real Estate Experts
At Belwood Investments, our team knows a lot about houses and buying and selling them. We have experts who are really good at investing and selling houses, planning and designing them, and making new neighborhoods. Our special brokers can help with anything related to buying or selling houses.
If you want to invest in houses, we’re here to help you make it easy and successful.