real estate

5 Ways to Acquire Wealth Through Real Estate

An Introduction

“Buying real estate is not only the best way, the quickest way, the safest way, but the only way to become wealthy.” A quote by Marshall Field ( a mid-19th-century American entrepreneur), who uttered the importance of real estate investing. For many, real estate is a safe way out of poverty, a way in which Field describes as “the only way”. What he means by this is that for the average person like you and me, real estate offers us the opportunity to acquire massive amounts of wealth in a relatively short period of time.  If you want to have a grip on your finances and acquire wealth in a stable way, then real estate is for you.  The various amounts of different strategies and methods available in real estate for the investor are mind-blowing. It’s no wonder that Field referenced it as the only way to become wealthy because real estate literally offers the opportunity for anyone to obtain wealth!

Here I will list the 5 best ways to invest in real estate and acquire wealth

1) Real Estate Rentals

The most popular and well-known method of investing in real estate is through rentals. Rentals are a great way for anybody wanting to make some extra side cash or expand their business. Of course for you to be able to rent you need a viable living space, check out Common Money Mistakes To Avoid for tips on saving up for that new house! Moreover, if you’re currently looking for a home, try finding one with a basement apartment. It doesn’t need to be fancy, the basement apartment will allow you to create a steady stream of income for yourself. If you don’t like the idea of renting out your home, then try investing in a vacation home instead. Renting an Airbnb for the summer can be a great way to make some extra cash. Keep in mind though these will suffer during the non-travel seasons, so be aware of when you buy.

2) Real Estate Options

Undoubtedly my favorite on the list, options are an excellent way to start investing in real estate with little risk. An option is a contract that gives the purchaser the option to buy or not to buy the property. With a set purchase price, duration of the contract, and a down payment, the option contract is a flexible method for both the investor and the buyer. Options contracts are also a good exit strategy if you’re looking to get out of a bad investment. Strong paperwork is required when dealing with option contracts, so make sure to hire a lawyer that can outline and explain the contract to both parties.

3) Fix and Flip

Yet another lucrative way to invest in real estate, fix and flip offers both diversification and convenience. Fix and flip requires a lot of persistence, and can be very time-consuming; however, the reward can be extraordinarily profitable. The skill of flipping homes when mastered can make you a tremendous amount of money depending on the investment. That being said, you still need a substantial amount of cash on hand to perform flips. This is where your contacts can come into play; having reliable real estate contacts can provide you with the money that you need when you need it. Hard money lenders, or private money lenders, are ideal for this since fix and flips are a quick transaction. Once the property has been found and inspected, your contacts will be ready to lend you the cash that you need.

4) Buy and Hold

Due to its risk, buy and hold has acquired quite a bad reputation. However, if done correctly, buy and hold can be one of the most profitable investment strategies. Buy and hold is an outstanding way to retire off real estate; it has established a rock-solid retirement plan for many investors. A buy and hold strategy requires a lot of time and money, and due to market fluctuations, buying at the right time is crucial. This is an attractive investing technique for most people due to its flexibility and high-profit potential. Raise enough capital through your other investments and you can establish a firm retirement plan that can outperform any 401k.

5) Wholesaling Real Estate

Wholesaling real estate contracts are by far the least risky way to dabble your feet into the real estate game. You essentially play the role of the marketer for the home seller. Payment is made through commission when the contract is sold; wholesaling also requires no money to be put down by the investor, which is what makes it such a safe way to learn about the business. But, what wholesaling does require is a substantial amount of time marketing. Competition can be immense for wholesalers, breaking into the market can prove to be quite difficult. Nevertheless, your persistence and knowledge can outweigh these barriers, and even if they don’t you can view wholesaling as a hands-on learning experience.

Hey there! I'm Alex, a freelance writer, and blogger. I started my journey towards FI in 2018, when I created this blog. I love talking about blogging, writing, personal finance, and internet entrepreneurship. If you enjoy my content, stick around, and we'll share ideas for reaching FI together!

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