If you play your cards right, a home can earn you more than what you paid for it. Buying a home and using it as a rental is one of the surefire ways to make money. Flipping houses and buying homes in neighborhoods increasing in value is also effective. If your community is developing quickly, you can sell the house at a profit, even after having lived in it. Recouping your initial expenditure and more is what makes an investment. There are different ways to make money off a home, each effective in its own right.
For instance, real estate in Lewisburg, WV, can be a great investment. You can rent it out for a considerable amount of money each month. This provides steady income off of the property. Some homes have potential for renovation and upgrades. Once you get that done, you can sell it for thousands of dollars more than what you spent on it. Some people’s businesses work solely off of flipping houses, so you know it can make a good profit.
Even if you occupy a home you have purchased, you can still make a profit off of it later. Certain neighborhoods have the potential for properties to appreciate years down the line. The profit that you can make in these cases can be significant.
In pretty much all cases, real estate does not depreciate in value. This makes it a good place to sink your money. It is important to know how to go beyond keeping your money safe in real estate to making money off it. That’s what this post is going to teach you how to do.
How to Make Money From a Home
There are a few broad paths by which you can make a profit off of a home. You can make money whether you live in the home or not, and that provides you with some flexibility.
1. Rental home: Not everyone has the money to buy a home for themselves. This creates the market for rental properties, which a large number of people occupy. You can buy a home and use it as a rental property. This way, you receive consistent monthly or yearly income. Profit off a rental property is more of a long term affair, so you’ll have to be patient. This is particularly the case if you have already paid for the home in full. Another option for rentals is to finance the house and pay the mortgage every month. Your tenant’s rent will cover the mortgage, with some profit on top of it. This way, your client bears the burden of the mortgage. The main downside to this method comes in if your tenant’s payments are no longer consistent. The burden of the mortgage transfers to you, and this can unsettle finances. In some cases, you can even rent out a basement apartment while living in the same building. The rent won’t be as much, but this is a great way to get the best of both worlds.
2. Flipping properties: Buying a home, renovating it, and selling it for a profit is known as ‘flipping’. Flipping a home is a short-term investment on a home that will yield large profit faster than a rental. For instance, if you search for homes for sale in Lewisburg, WV, you may find some selling at good prices. This may be because the owner doesn’t wish to put in the effort or money to make some critical repairs. These kinds of houses are perfect to pounce at. You can make the needed repairs, and even put in some home improvements that add value. This way, you can sell the house at a profit way above what you put into it.
3. Selling in improving neighborhoods: Some communities develop faster than others. When amenities like roads improve in neighborhoods, this can increase their value. Building structures like hospitals and schools increases the value of surrounding neighborhoods. You can buy a home in such areas and hold onto it until it has attained considerable value. Even better is to live in such a home until it has gained enough value to make a profit off of. Knowing which neighborhoods are best to buy in can be difficult if you don't pay attention to trends. This method can be especially effective when you pair it with flipping. You can buy a home in a developing neighborhood and sell when it is well-established. This can increase profit margins by a significant amount.
Tips for Investing in a Rental Home
Buying a home for a rental property is the most straightforward way to make a home investment. It takes some time to get your profit off of it, depending on how you decide to finance it. But it is one of the most straightforward ways to make a profit off of a home. Here are some tips to help make your home investment profitable.
- A property manager will make your experience easier but will reduce profits. It’s almost definite that your tenants will have some issues in the home if they live in it long enough. If you don’t have the necessary skills to help out with any repairs or fixes required, you’ll need a property manager. This way, the burden of any issues is off of you, but you’ll have to pay the property manager for their services.
- Down payments are higher than owner-occupied homes. You can get away with paying a tiny percentage for your down payment on a house you plan to occupy. But for a rental property, you’ll need to pay as much as 20% of the total cost of the home. It’s important to know this before getting started.
- Get landlord insurance. This is essential! Damage to your property or injury on the premise due to structural issues will be covered by this. The premium is worth paying to keep your investment profitable.
- The location is very important. When looking for where to buy an investment property, you need to make sure demand is available. Areas that people are actively moving into are perfect, as they need places to live in. Having a rental property ready for occupancy is smart business.
Places like Lewisburg, WV have homes for sale all the time. These homes are perfect for investment opportunities. The best part is that if you fail to make a profit, your money is safe in real estate. Rebecca Gaujot, Realtor, can help you find the perfect homes to get your investment started in.
There’s money to make if you know where to look. Locations like Lewisburg, WV, have potential, but you'll need someone with expertise. Call Rebecca Gaujot, Realtor, at 304-520-2133. She'll find you a home that will be a solid investment.