Investing in real estate can be tricky, but if you do it right, you can earn a ton of cash. Here are a few tried and true methods for making money in the real estate game.
Banks don't like to keep too much real estate inventory on hand, so when they foreclose on a property, they are often anxious to get rid of it, and they are usually willing to sell it for a good price. Call the Real Estate Owned (REO) department of your bank to find out about properties that they are trying to unload. You can usually buy foreclosures for cheap, fix them up a bit, and then flip them for a profit.
Check out the rental income potential first, and compare it to the monthly mortgage payment that you will need to make. If you are able to collect more money in rent than you owe to the bank each month, you could earn a tidy profit. Keep in mind that the less you have to borrow to buy the rental property, the less your monthly payments to the banks will be.
If you are looking for a place to live, you may want to consider buying a two family house. If you are lucky, you will be able to rent out one of the units and have the tenant's rent cover the monthly mortgage payment while you live in the other unit for free.
If you are good at making home improvements, you can buy houses that are not in terrific shape, fix them up and sell them for more than you paid for them. Try remodeling the kitchens and bathrooms for the most bang for your buck.
Some neighborhoods go through periods in which all of the home prices fall. If you are able to buy during these periods, and hold the property for several years, you could put your self in a great position to make a lot of money when the home prices rebound. You can always rent out the property while you are waiting for home prices to pick up.
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