You can’t go anywhere without hearing about real estate. It seems like everywhere you look, people are making money in real estate. Home prices are increasing, demand for rentals is soaring, and people are flipping homes and becoming millionaires.
One common misconception is that you need a real estate license in order to make money in real estate, which is completely false. You do not need a realtor license in order to make money with real estate at all.
To be successful in making money through real estate, one must be educated on the topic, have patience, time, and put in the effort. Additionally, a bit of luck is involved, as well as having some financial capital. While it is true that you will need some money to get started in real estate, you don’t need nearly as much as many people think.
Here is a list of ways to do this:
9 Ways to Make Money in Real Estate Without A License
In other words, investing in real estate is a good way to make money.
There are a variety of ways that you can make money in real estate, including both small and large scale methods. Some of these methods may be surprising or interesting to you, and offer a unique way to invest in this field.
You can take back control of your life by finding a job that you can do with little more than a laptop and an internet connection. These types of jobs will allow you to work from anywhere, and give you the freedom to create your own schedule.
1. Single-family rentals.
The most popular way to make money in real estate may be to buy a single-family rental (SFR) home and invest for the long term.
There are many sources of financing available for purchasing a single-family home, and tenants often prefer to rent them.
2. Rent to own.
Even though renting a home means you’re not buying the property, you can still invest in real estate. Some real estate investors and developers may offer tenants a rent to own option for build-to-rent (BTR) subdivisions.
In a rent to own agreement, the landlord and tenant agree that a portion of the monthly rent payments will go towards the purchase price of the home. If the tenant has built up enough equity, they can get a loan to buy the home to live in or to rent out.
3. Rent with option to buy.
A rent with option to buy program gives a tenant the right to buy the home from the landlord after a certain point in time or if the home is listed for sale. The tenant is not obligated to buy the home.
A rent-to-own program differs from a traditional rental in that a portion of the monthly rent is applied to the purchase price, meaning the tenant will need to come up with a down payment on their own.
4. House hacking.
People that already own a home can get into the real estate rental business using a strategy known as “house hacking.” As the name implies, part of the home is hacked and used to generate rental income.
Two ways to hack a house would be to either rent out an extra bedroom that has its own bathroom, or to convert a basement or attic into a small studio apartment. Generating extra rental income from house hacking can be put towards a down payment on another rental property, or used to pay down the existing loan on the home faster. This strategy can be beneficial in building equity and achieving financial freedom.
5. Short-term rentals.
Some people generate income from real estate by renting out their entire home on a short-term basis. Homes in places like San Francisco or Miami would be good for short-term or vacation rentals, or for business travelers who want something different from a small and expensive hotel room.
The potential advantage of renting a home out for the short-term is that the rent price may be higher. However, tenants who rent for a shorter amount of time may be more demanding, and there can be a lot of work involved in transitioning between renters, which makes owning a short-term rental more similar to being in the hospitality business than being a landlord with a tenant on a long-term lease.
6. Home flipping.
The goal of home flipping is to buy low and sell high. Sometimes, when owners don’t have the time or money to take care of their property, the place falls into disrepair.
If you’re looking to make a quick buck off of flipping a property, you need to be an expert at estimating repair costs. Offer the owner a price that is lower than the market value in exchange for a quick close with as few contract contingencies as possible.
If the offer is accepted, the home flipper closes escrow, repairs the home, and then re-sells it.
However, instead of fixing up homes to sell them to retail buyers, wholesalers sell them to other investors. Real estate wholesaling – also known as contract flipping in some areas – is a variation of home fixing and flipping where instead of fixing up homes to sell them to retail buyers, wholesalers sell them to other investors.
A wholesaler buys properties from sellers who are in distress, such as those going through a divorce or experiencing financial hardship. The wholesaler negotiates a purchase contract with a below-market price and opens escrow with a small refundable earnest money deposit. The wholesaler then finds another investor to assign the contract to in exchange for a wholesale fee.
The wholesaler will be paid when the deal closes, and the new owner will then make any repairs that are needed before selling the home or renting it to a qualified tenant.
8. Real estate bird dog.
People with plenty of time but little money can start their own business by acting as bird dogs in the real estate industry.
Bird dogs are hired by real estate investors to either find distressed property or owners selling their property off the market. In exchange for finding this information, the real estate investor will give the bird dog a fee. The amount of money that real estate bird dogs earn may vary from $500 to $5,000 or more, depending on the investor and the quality of the lead.
9. Private lending.
People who can’t qualify for traditional financing or who need a loan to fix and flip a home can get a loan from a private or hard money lender. The current interest rates and loan terms create an opportunity to make a large profit in a short amount of time.
While there is some risk involved in private lending, it is still a popular option among many people. To minimize risk, private lenders may require the borrower to have a large amount of equity, cross collateralize the loan with other assets the borrower owns, or take a small piece of the deal.
Capitalize on your network.
Your list of professional and relevant contacts is important in finding the right freelance or consulting work.
Having a network of contacts is important if you want to work as a designer or a virtual assistant. Don’t forget that getting a job is a two-way street – contacts can help you to:
- Reach out to new companies. The chances are, someone you know will know someone at the brand you’d love to work for. Hit them up for a connection or an insight.
- Understand what clients want. Use your in-house or connected contacts to uncover the best ways to stand out when you’re going for a job.
- Improve your output. A broad understanding of your chosen industry will help you in delivering super relevant work in a freelancing or consulting role.
Kurt has gone from the financial lows of the ’08 financial crisis to personal financial success. He is a professional real estate investor, media buyer, faithful Red Sox Fan.
One of his passions is financial education and the pursuit of financial freedom.
You can learn more about Kurt here, or get a hold of him on Facebook or Twitter.