HOW TO MAKE MONEY IN REAL ESTATE WITHOUT OWNING A PROPERTY
Did you know that you can make money in real estate without owning a home? Not only is it possible but many people are doing it right now.
There is a small group of real estate investors that avoid the trouble of the three Ts: tenants, taxes, and trash. That annoying trio can make being a homeowner a daunting task for property owners trying to make a meager profit. In addition, the emotional burden and the burden of debt may lead some to think that real estate is not worth much.
Think. Here are just a few ways to profit from real estate without owning a rental property.
couple looking at finances in the kitchen at home
1. Sublease your rent.
Subletting occurs when a tenant sublets their space to another person that was not included in the original lease with the landlord. This can be a temporary arrangement while the lessee is on business or vacation. But it can also be a long-term arrangement where only one tenant is responsible for renting out the empty rooms in an apartment or a house.
If this is allowed in your lease (not all leases allow it), chances are there is no limit to how much you can charge. In cities with no rent controls, tenants can ask for whatever the market allows. This can mean that the sublessor will pay the majority of the rent, allowing the lessor to profit from their housing cost savings.
2. Receive real estate investment trust.
Real estate investment trusts, or REITs, function like mutual funds. A company owns a portfolio of assets: commercial, residential, land, etc. They look for investors to pay the development and floating costs of the properties they own. And when those properties become profitable, investors receive dividends.
There are several private REITs, but hundreds are publicly traded on the stock exchange. This form of investment is perfect for those who want to go completely empty-handed and like to hedge their bets on a variety of properties around the country. If you still can’t decide, consider Real Estate Mutual Funds and Exchange Traded Funds (ETFs), which can bundle several different REITs together so you don’t have to choose one.
3. Crowdfunding for your investment.
Crowdfunding isn’t just for donations and charities anymore. Today, you can invest in major real estate deals using the very same funding structure on sites like Fundrise, Realty Mogul, and Peer Street. Each has different minimum testing and investment requirements, but most people have a hard time trying to figure out the exact difference between crowdfunding and a REIT.
Certainly Dividends provide a comprehensive explanation, but the key difference is that when you invest in a REIT, you are investing in a company that owns real estate. In crowdfunding, you and a group of other like-minded people invest directly in properties of your choice. Basically, you pick the things you like and discard the ones you don’t. Either way, you’re not involved in day-to-day management – and you still get your dividend checks in the mail.
4. One-time loan.
Hard money loans are a great way for people with extra cash to make huge profits without owning a piece of the property. Essentially, you can lend to a borrower who doesn’t want a traditional mortgage. For example, someone who is planning to buy a property with cash to transfer a house may not always be able to get a quick bank loan. So they look for someone willing to lend a lump sum of cash and pay a premium for it.
If the loan fails, instead of reclaiming the investor’s car or taking a cut of their salary, the loan is secured by that investment property. If things go downhill, then the property is yours. But since property acquisition is not your last game, there are ways to identify a seasoned investor with a great track record of executing their projects and making a profit. significant for their investors. Many loans have high interest rates and fast repayment times that are mutually beneficial. It is common to see a 10-15% return in just a year or two. And if you find the right borrower, the relationship can be long and profitable.
5. Become a wholesaler.
Wholesalers are simply middlemen in real estate transactions. In such situations, a person behind their mortgage or taxes may be willing to sell their home below market value to avoid foreclosure. People who are in this situation often have to go through many other challenges, so the idea of selling a home to free up some money is not a good idea.