At this point, most people are aware of the fact that there can be large profits in real estate. What very few know, however, is that there are many, many different ways to make money in the real estate industry. Here are some of the top real estate business ideas that you can use to tap into the lucrative property market.
7 ways to make money in real estate
Become a landlord.
Do real estate photography.
Become a real estate agent.
Combine real estate business ideas.
Let’s look at each real estate business idea in more detail.
1. Become a landlord
One of the longest-standing real estate business ideas is to be a landlord. By owning a property and renting it out, you can make money in two different ways:
- Through the cash flow that you’ll receive in the form of rent each month.
- Through the appreciation of your property’s equity over time. You realize these gains upon selling the property.
Between these two, being a landlord gives you both a reasonably good cash flow and a strong investment asset.
Interestingly, landlording for real estate profit has been around since medieval times, when actual lords owned land and collected payments from those who worked on it.
In more modern times, real estate has created many millionaires and billionaires throughout the world. America’s first multi-millionaire, John Jacob Astor, for example, bought up gigantic portions of land in and around New York City in the late 18th and early 19th centuries. Astor would then lease the land to developers, who would build on it. At the time of his death, he was the richest man in America.
It is possible, however, to do it part time, especially if you use a property management company to take care of day-to-day tasks at your rental properties. You can also run your rental business from your own home, though many landlords do eventually choose to set up an office for convenience.
2. Flip property
One of the most high-profile real estate business ideas, property flipping has been popularized by several TV programs over the last several years. Property flipping involves buying a distressed home, fixing and modernizing it and then selling it for a profit, usually to a retail buyer. While flipping a house doesn’t offer the continuing cash flow of rental income, it can create large, one-time profits on individual properties.
Many general contractors will buy and flip one or two homes a year for extra money on the side. On the other end of the spectrum, there are real estate investors who specialize almost exclusively in flipping. Like rentals, a property flipping business can be run from your home if you choose.
3. Manage property
It’s a common misconception that you have to own property to make money from it. If you want to jump into real estate without needing to own a property, try property management. Property managers handle maintenance, upkeep and in many cases rent collection for a property owner in exchange for a fee (usually a percentage of the rent).
Though you could run such a business from home, it will be easier to have a dedicated business location, as you’ll need storage for paint, drywall, cleaning supplies and other common maintenance materials that will be used in the properties you manage.
Real estate investors need to be able to find good deals in order to run their businesses. This consistent need for deals has given rise to an entirely new set of freelance real estate professionals, known as bird dogs.
Bird dogs find good deals for investors, earning either a small percentage of the deal or a flat-rate fee.
The reality of bird-dogging is that it is nowhere near as easy as some people make it out to be, as investors will never pay for information about properties that are already listed. If you can seek out new sellers before a property is listed, however, you can make some real money as a bird dog. Bird-dogging can be done part-time or full-time, and most real estate bird dogs work from home.
5. Do real estate photography
Not all real estate business ideas have to do directly with the properties themselves. Some, such as being a real estate photographer, involve marketing the property. Real estate photographers take photos of homes for sellers or landlords that are then posted online as part of sales materials.
As a real estate photographer, your hours are largely determined by the number and sizes of houses you have to shoot in a given day. Larger houses require more shots and therefore more time. Many real estate photographers choose to base their businesses in their homes, though most of the actual work will be done on-location at the properties being photographed.
Read more about creating a successful photography business here.
6. Become a real estate agent
While some business models, like bird-dogging and flipping, are more novel, being an agent has been a common real estate business idea for as long as the modern property market has existed. Becoming a real estate agent is more difficult than breaking into some other parts of this industry, as it requires formal education and state certification in most places. Being a real estate agent is also one of the few business models in which working from home is rarely a workable option.
Check out our “Getting started in real estate” worksheet:
7. Combine real estate business ideas
As you can see, the real estate industry has very diverse opportunities for aspiring entrepreneurs. One of the best ways to build a small real estate business, however, is to combine different business models that make sense together.
A property management company that offers photography services can save owners time and effort.
Many investors choose to both rent and flip properties to give themselves more diverse income streams. If you combine multiple ways of making money in real estate, you’ll be able to find success more easily.
Take the first step now
These are just a few of the dozens of real estate business ideas that have been used to create sustainable, profitable businesses. Whether you want to become a real estate agent, a landlord or a property manager, the hardest part is always taking the first step. Begin working on your real estate business today so that it can turn you a profit tomorrow. Promote your bird-dogging, property management or real estate photography services with a website designed especially for real estate professionals.