When I started in real estate, I was ignorant. Like everyone else, I could dream what could be accomplished—but wasn’t sure how easily things could all fall apart in a hurry without a good plan. I’ve learned from my own investments and from working with students on their own journeys in the past few years that there is no single “best” approach. Instead, there are several effective approaches, each for different people, budgets, and goals.
So today, I’m going to share seven real estate investing strategies that actually work. They are not textbook strategies—they are real strategies that I have seen work, even for novices. So let’s dive in and see which one suits you best.
Rental Properties: A Consistent Stream of Income
Rental properties are a sure thing because they are simple and predictable. Buy a house and rent it out, and then sit back and receive those monthly checks. Sounds simple, doesn’t it? Well, believe me, there are pitfalls if you don’t remain smart.
One of my very earliest clients bought a parcel of land without getting proper numbers. It was profitable until repair issues arose that were unforeseen. Suddenly, what seemed like a cakewalk was a headache. Always account for adding to your math repair fees, insurance, and land taxes.
When choosing a rental investment, location is crucial. Look for places with stable job markets and good schools—those have the most demand for rentals. Do your homework, and rental properties can give you stable cash flow for a very long time.
House Flipping: Making Money with a Little Sweat
Flipping houses is lucrative in short-term gains, but TV shows don’t expose you to all the sweat and elbow grease. Basically, you are purchasing undervalued homes, repairing them, and selling them for a profit. It is thrilling to think about—and can be—but there is work involved.
I’ve seen flippers spend a small fortune on upgrades that buyers don’t care about. Remember, you’re flipping for profit, not to win over your Instagram followers. If you’re new to this, consider learning from YouTube videos to improve oneself before diving in. Invest your renovation budget in upgrades that add to property value, like a new kitchen or a remodeled bathroom. Be smart with your budget, and flipping can be a regular income source.
Investing in REITs: Making Money Passively Without All the Hassle
Not everyone will work with tenants or with builders. REITs (Real Estate Investment Trust) do the work for them. They are like stocks, but in real estate—you invest in companies with buildings, and you get dividend checks.
This strategy is best for you in the event that you like low-key. My past student, who was a thrill-seeker, utilized REITs since they enabled her to receive passive income without having to deal with any calls from tenants regarding maintenance. Just remember that REIT returns typically arrive in a timeframe, so be a good sport.
Real Estate Crowdfunding: Invest Little, Win Big
Real estate crowdfunding allows you to pool your funds with other investors to invest in big properties. It is best for those who don’t have a large sum of cash in their pocket but still want a stake in real estate.
However, be cautious in making a decision on using a good crowdfunding site. I have noticed that there are sites with very high fees that rob investors. Be cautious, research whether or not a site is reputable, and verify that a return is worth a fee. With a good selection, a small investment can bring good returns.
Wholesaling: Earning Money Without Purchasing Properties
Wholesaling is real estate matchmaking. You find undervalued properties, place them under contract, and then assign them to a different investor for a fee. You do not actually end up with the property, and that is what creates a low-risk entry.
I remember one student who went into wholesaling with hardly any experience. He got his very first deal within a few weeks, simply because he’d established good relationships with investors in his locality. Wholesaling is about networking and being able to spot a deal in a hurry, so if you possess negotiation skills, then this may be for you.
Buy-and-Hold Investing: Slow and Steady Wins
The buy-and-hold technique is all about playing for the long term. You purchase a piece of real estate and hold on for a few years. This is a great way to accumulate wealth, but you have to be patient.
One of my very first investments was a simple buy-and-hold in real estate. At first, it wasn’t spectacular, but in hindsight, I can see that it paid more for me than just about anything else. Invest in good neighborhoods, focus on good properties, and let time do all the heavy lifting.
Short-Term Rentals: Earning Money from Airbnb and Holiday Homes
Short-term rentals like Airbnb can bring potentially more income than regular rentals, with a catch, you have to work harder to manage them. You will have to deal with new tenants, market your property, and address between-stay maintenance. I had a student who was able to double her income by going from traditional rentals to Airbnb. Her secret was to pick a tourist area and to get to work on providing a memorable guest experience.
Be mindful of city regulations, however—there are laws in a few cities that restrict short-term rentals. Choosing the optimal real estate investment approach depends on your desired outcome, budget, and lifestyle. Some like the thrill of flipping houses, and others like the consistency of rentals. There is no single best approach, and what was best for my students or for me is not necessarily best for you.
The key is to start small, learn from each experience, and build on your investments incrementally. Real estate is one of the only tried and tested formulas for building wealth in a sustainable manner—but only when you do so with tact and care.
FAQs
What’s The Ideal Strategy If I’m Just Starting Out?
If you’re new, rental properties or REITs are usually the safest bets. Both are straightforward, provide consistent returns, and allow you to learn as you go.
How Much Money Do I Realistically Need To Start Investing?
It depends. With crowdfunding and REITs, you can start with less than $1,000. House flipping or buy-and-hold strategies usually require significantly more upfront capital, at least $20,000 or more.
Is Real Estate Investing Riskier Than Stocks?
Real estate usually involves less volatility compared to stocks. While prices fluctuate, real estate generally appreciates over the long term, especially if you invest wisely.
