Updated: Oct 13
Passive income. Equity. Monthly rents. Tax breaks. These are some of the benefits that come with investing in real estate.
Buying rental property has become a popular investment strategy in recent years. With the rise of fast-growing real estate markets around the country and a mobile workforce relocating at record rates, rental real estate can be a solid investment tool. It’s also a tangible asset that seems likely (but not guaranteed) to appreciate over time as the sale prices of homes in the U.S. continue to climb steadily.
There are multiple ways you can make money from real estate beyond just buying and renting a property. By recognizing and understanding other opportunities, you can build a portfolio of diverse assets to help you achieve your financial goals.
Below are different ways you can make money in real estate:
1. Fix and Flip
Flipping houses involves purchasing a home for a below-market rate and remodeling the property to add value and reselling it at the highest amount to earn a return. Making the most of this highly involved process requires looking at key factors like affordable materials and labor.
2. Short-Term Rentals or House-Hacking
Short-term rentals provide greater flexibility but can still generate a steady form of income. Popular platforms such as Airbnb and VRBO can provide a gateway into this niche. House-hacking is another method where you can also pick up extra income by renting out a spare room or turning a garage into an additional apartment. By creating rentable space, you can reduce your total housing costs while learning how to become a landlord.
3. Real Estate Investment Trusts (REITS)
REITs are a passive form of income that involves investing in companies that own income-producing properties. These can be purchased through popular stock exchanges and can also eliminate the hassle of buying and managing a property on your own. However, REITs are not necessarily invested exclusively in real estate. Rules allow them to invest in other vehicles, such as being lenders.
This strategy involves being the “intermediary” for investors and sellers. The wholesaler finds good deals on the market and then finds a buyer who can purchase the property for a slight markup. Think of wholesaling as an investment form that requires good sales and marketing skills, and generally requires a real estate license, or partnering with one.
5. Buying and Holding
This long-term investment strategy involves purchasing and holding property with the intent to sell it after an extended period to reap the benefits of appreciation. The property is typically leased during the “holding” period to help with financing.
6. Ruthian Investment Fund, LLC
With Ruthian, you invest in residential real estate without having to worry about maintaining or managing any physical properties. When you become a Ruthian member, you purchase shares that in turn own the properties. It's a bit like investing in a mutual fund, only instead of stocks, Ruthian deals exclusively with residential real estate. You can earn money by becoming a member in two ways: First, earning dividend payments made to investors. Secondly, after the required holding period, you can sell your investment for a profit. You can invest in Ruthian similar to investing in a stock, and it eliminates the hassle of buying and managing property on your own.
If you’re thinking about investing in real estate, we would love to chat with you. We’ll tell you how we are pooling our resources so we can purchase multiple residential income-producing properties and leverage growth.
By lowering the investment entry point we are not only able to diminish an investor's capital risk, but we’re able to further mitigate the risk by being able to hold multiple investment properties.
To learn more about the Ruthian Investment Fund, go to https://www.ruthianllc.com.