As we all know, real estate is a very lucrative business. People are known to make millions and even billions using their property possessions. However, you cannot achieve success in real estate without a set of very specific skills. It doesn’t mean that you need to have education in the real estate field, but with the necessary knowledge about how real estate works and how money is made there surely won’t hurt. Start your path as a successful real estate owner with our 5 tips!
1. Investment clubs
Some people think that investment clubs are suitable only for experienced property owners who have completed hundreds of deals. In reality, investment clubs are welcoming all types of members. Usually investment clubs consist of a few investors who join their forces and resources in order to maximize their profits from the real estate market.
An investment club is a great way to get into real estate investment if you don’t have enough money to do it on your own. For example, by working in cooperation with four other members you can each invest ?2 million and buy a ?10 million property. Then, after the property is resold, you each get an equal share of profits.
2. Buy and hold
This type of real estate investment is not a quick one: unlike other forms of making money with real estate, this one can take months or even years to bring you the result you want. All it takes is two relatively simple steps. First, you buy the property you want. Second, you wait until the value of the property reaches the desirable level, and sell it.
This method of property investment sounds rather easy, but it takes a lot of patience and business savvy to know exactly the right time to dispose of the property. Not only do you need to have extensive experience in real estate, but you also have to keep in touch with the property market and its trends and changes.
3. Buy and rent
Our next method of real estate investment takes way less time than the previous one. If you have enough money, this might be the best solution for starting your career in property business. You start by buying property. It can either be residential property (houses, apartments, duplexes, etc) or commercial lots. Then you renovate the property, if needed, and rent it out, collecting money from tenants.
To make money with buying and renting property, you need to buy real estate with intention of renting only in specific areas, where demand for rental properties is very high. Usually the most suitable locations are big cities: Lagos, Abuja, Rivers, and others; both city centres and the suburbs. We recommend signing only long-term contracts with your tenants, starting from 6 months, in order to minimize vacancy periods and maximize your profits.
4. Property flipping
This is one of the most popular ways of making money with real estate. At first glance it looks rather easy: you buy property, add some value to it, and sell at a higher price. In reality, every step of this process takes a lot of consideration from you.
First, you need to select the right location, because not every area is suitable for property flipping. Then you have to choose the ideal property. Usually experienced real estate specialists buy old property in a decayed condition since it costs less than new property. After that you renovate the property. Make sure all changes add to the property value, as new buyers will not be willing to pay for the renovations they don’t need. And then you have to find the buyer.
5. Property development
Real estate development is usually recommended to investors with a lot of experience in the field. This process consists of purchasing big land plots and using them to build new houses or apartment complexes. Investors who do this are called property developers.
The downside of real estate development is that it can take a few years until the project starts bringing you real profits. Additionally, it can take a lot of your time, money, and resources. However, if everything is done the right way, your ROI (return on investment) can turn out to be bigger than you anticipated.