Real estate is one of the most popular ways to create wealth and build financial security. With the right strategies, it can be a great source of passive income that grows over time. You don’t have to own property or be a real estate professional to make money in this field. There are plenty of creative side hustles for everyday people who want to start generating extra cash through real estate investments.
According to Bankrate, [70% rental properties](https://www.bankrate.com/mortgages/investment-property-statistics/#:~:text=About 70 percent of rental,all units%2C Census estimates show.) are owned by individual investors in the United States alone, and those numbers have been steadily increasing since then. Research from CoreLogic suggests that investment home sales rose by 24% between February 2020 and 2021 due to an influx of buyers taking advantage of low-interest rates during the pandemic.
If you're looking for ways to invest your money with minimal risk while making some extra money, these seven creative real estate side hustle ideas will help you get started on your journey toward financial independence.
7 Real Estate Side Hustle Ideas & Strategies to Build Wealth
Here are seven creative and profitable real estate side hustle ideas to build wealth.
REIT Investing
REITs (Real Estate Investment Trusts) are a great way to invest in real estate without becoming a landlord or dealing with the hassle associated with property ownership. REITs are funds managed by professionals who specialize in owning, operating, and managing portfolios of income-producing properties such as office buildings, apartments, malls, hotels, and industrial warehouses.
REITs trade on major stock exchanges like any other security so they can be bought and sold easily through brokers. They usually pay regular dividends, which can be a great way to generate passive income.
REITs offer investors various benefits, such as diversification, minimum management, dividend-based income, inflation protection, and liquidity, which provides an excellent cash flow investment opportunity. Learn what are cash flow investments are to make the best out of your investment.
You can also invest in private properties like single-family homes that require even less investment and minimum management. Here is investing in single-family rentals to take full advantage of the opportunity.
BRRRR
BRRRR is a real estate investment strategy that takes several steps but is a proactive way of generating consistent income on your investment. This acronym stands for Buy, Rehab, Rent, Refinance and Repeat. Here's how it works:
- Buy: First, you'll need to locate an investment property with potential in your area. You can search online or work with a real estate agent to find properties that fit your criteria.
- Rehab: You'll need to make some repairs or renovations to help increase the property's value. This may include upgrades such as a new roof, a paint job, or adding extra bedrooms.
- Rent: Once the property is improved, you can start renting it out. You'll need to determine the appropriate monthly rent rate for the area and advertise your property to tenants.
- Refinance: As you make payments on the loan for the investment property, you can take advantage of lower interest rates and refinance the loan. This allows you to pull out the cash you put into the renovations and possibly even get some additional cash.
- Repeat: After successfully going through buying, rehab, renting, and refinance once, you can repeat it with other investment properties.
The BRRRR strategy can be an effective way to invest in vacation homes during the booming tourism industry. See how to use the BRRRR method for vacation rentals.
House Hacking
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House hacking is a great option for anyone looking to break into the real estate market. It’s a strategy to purchase a multi-unit property and rent out one or more units. You can then use the rental income to cover a portion (or all) of your mortgage or other expenses, essentially setting yourself up for a passive income.
Not only can house hacking help generate extra cash flow, but it can also help you establish a good credit rating and accrue equity in the property over time. Living onsite allows you to keep an eye on your property and tenants while taking advantage of any tax breaks.
House hacking is a desirable option for those just starting in real estate. Not only is it relatively affordable, but you don’t need a large amount of cash upfront or extensive experience in real estate.
Fractional Real Estate Investing
Fractional real estate investing offers an opportunity for investors to purchase a fraction of a property and benefit from its financial gains. By getting involved with fractional real estate investing, investors can diversify their portfolios, lower the risk of loss, and reduce the overall financial burden of the investment.
This type of investing allows investors to purchase a small piece of several properties and reap the rewards without investing in an entire property.
Fractional real estate investing is becoming increasingly popular with investors looking to diversify their portfolios and spread out the financial risks associated with investing in real estate. It also allows investors to purchase smaller pieces of high-value property, which can be more profitable than investing in an entire property.
Many real estate opportunities allow fractional investment, but not all offer high potential or promise. It is recommended to research and invest through the best fractional investing platforms to get the best out of your investment.
Become a Referral Agent
Referral agents can act as a mediator between buyers and sellers, helping to match potential clients looking to buy or sell a home. This can be done through networking, online and offline resources such as social media, classifieds websites, real estate magazines, and more. The referral agent earns a commission on each sale by connecting buyers and sellers.
Referrals agents need to understand the local real estate market and know the ins and outs of the industry. You should also be knowledgeable about local laws, regulations, and taxation related to real estate deals.
Referral agents must be prepared to answer any questions from potential buyers and sellers and handle the paperwork associated with real estate transactions. With the right knowledge, networking skills, and preparation, referral agents can make a lucrative side hustle in real estate.
Flip Land Parcels
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Flipping land parcels is an efficient strategy that can generate significant income with relatively low risk and limited involvement. By investing in land parcels, you can benefit from the appreciation of land values while also achieving tax benefits, such as deferring capital gains.
The key to flipping land parcels is to purchase them at a discounted price and then quickly resell them for a profit. This can be accomplished through market research and careful planning.
Before you invest in land parcels, it is important to understand the local real estate market and zoning laws in the areas where you want to invest. You should also research available land parcels and find out what each parcel offers.
Invest in Farmland
When it comes to real estate investments, farmland may not be the first thing that comes to mind. But with its low entry cost and the potential for a high return on investment, farmland can be an excellent choice for real estate side hustles.
Farmland investments offer a range of advantages, from a low capital requirement to relatively few ongoing maintenance costs. Farmland tends to have steady demand and better protection from market downturns than other real estate investments. That said, agricultural land is often subject to trends like crop prices and regional climate conditions, which can influence its potential financial success.
It’s important to research before investing in farmland and consider what you want to get out of the investment.
Key Takeaways
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Real estate side hustles can be a great way to make extra money and diversify your investments. Whether you are looking to invest in fractional real estate, become a referral agent, flip land parcels or invest in farmland, there is an option that would suit your needs and goals. It's important to research the local markets before investing so that you understand all the potential risks involved and how best to maximize profits from each investment opportunity.
- REIT investment allows you to diversify your portfolio while gaining access to high-value properties.
- Fractional real estate investing allows investors to purchase smaller pieces of high-value property that can be more profitable than buying an entire property.
- Flipping land parcels is an efficient strategy for making money in real estate, as it requires a low investment with the potential for high returns.
- Investing in farmland can be a great low-risk option with a potential for high returns. Research is key to finding profitable farmland investments.
Investing in real estate can be a great way to earn extra income, and Getaway is here to help you do just that. With our resources and expertise, we can help you build a profitable real estate side hustle that fits your lifestyle. Sign up today to start exploring your options.
