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How to Make Money in Real Estate Without Owning a Property

How to Make Money in Real Estate Without Owning a Property
by Jerome Foster - September 22, 2021

The Real Estate market has more often than not posed as an excellent investment opportunity. Last year alone, the housing market went off the charts, with the stock gaining $2.5 trillion in value. 

If you’re considering throwing your hat in the ring too, but don’t want the hassle that comes with owning the property, there are actually many ways you can do that. We consulted realtors and real estate investors, and here are the different ways they recommend you can invest in real estate without owning any property.

Real Estate Investment Trust (REIT)

There are now ways to be able to invest in real estate without owning actual property. One of those ways is investing in a Real Estate Investment Trust (REIT).

A REIT is a company that generates its investment from either owning or operating income-producing real estate assets that may come in the form of office buildings, residential developments, warehouses, malls, hospitals, infrastructure projects, etc. Investing in a REIT allows investors to grow their money from real estate without the need to purchase or manage physical properties. This saves investors the hassle of going through the capital-intensive process of buying property and spending hefty fees for its maintenance. 

REITs may sound like a lucrative investment, but it also pays to know some minor risks that an investor may face when buying REITs. Some of these include having no control over the income of the company that the REIT is under. REIT companies may not also experience the same amount of gains from growth companies, as REITs must pay out a huge percentage of their profits to their investors in the form of dividends. 

REITs are good for long-term investments, as they produce a steady amount of dividends. Aside from receiving dividends, investors can also experience capital appreciation if the stock price of a REIT that they invested in increases.

Emily Cooper, Founder, and General Director Oliver Wicks

Wholesaling

Wholesaling is an easy way to make money from real estate without owning property. To do it, you need two things: a source of fresh, enticing property and a willing market for the same. So, you go out and seek good property deals that have not been listed or awarded to any seller. Get the requested purchase price and add a worthy investor fee, then present it to your market. You will only need to do serious marketing, and soon you will be the go-to person for all things property. 

For this concept to work, though, ensure that the property you are selling is an easy sell. Second, understand that, unlike brokerage, wholesaling is not passive and needs aggressive marketing. You are making tiny cuts from each sale; therefore, you need to push more sales. 

Chris Brown, Real Estate Expert, and CEO of Tudor House Immigration Services

Work With A Realtor

If you're looking for creative ways to make money in real estate without owning a property, you can approach realtors. You can find them through search engines or by talking to people you know. A realtor will be appreciative of your help, especially if you are 10 times faster than he is. If you are creative, there are things you can do for him. For example, you can deliver important documents or track down people on the phone. You can also be a better secretary. You can often do things that are very helpful that the realtor does not have time for. 

Chris Panteli, Finance and Investment Expert and Founder of LifeUpswing

Sublet on Airbnb

The growth of vacation rentals has made subleasing properties on Airbnb a fairly popular way to invest in real estate. There is no actual ownership in this case; you have a long-term lease (usually one year). When you create an Airbnb listing for the property, you are able to profit from the difference between the rent you are paying for the lease and the income you generate from Airbnb. Often, it can generate several thousand dollars per month in profit. The work is not passive as it is run more like a hotel, but the returns are significantly higher than traditional real estate investments. 

It is important to ensure that you have the permission of the landlord before you sublet the property. The failure to do so could result in eviction if you violate your lease agreement. Openly discuss what you plan to do with the landlord, and in most cases, they won't mind. Most landlords will love it as they understand that in order to use the property as an Airbnb, it needs to be cleaned constantly and maintained; otherwise, it will never get booked. Keep in mind that if you sublet, the landlord may require that you are responsible for fixing damage caused by guests. 

Kevin Bazazzadeh, Owner Brilliant Day Homes

Be A Hard Money Lender

 Lots of investors become hard money lenders to get secured loan payments that don't need to invest in actual real estate properties. It is a good opportunity to help people that want to invest in their dream homes. This is secured and can charge higher rates than banks and other institutions, but this is actually beneficial for you who have to take most of the risk and earn equivalent to that risk.

Julian Goldie, CEO of Goldie Agency 

Invest In Home Construction

While buying and selling homes can be unpredictable in the current market, experts have tipped the construction industry to keep on booming. The construction business is said to be an everlasting commodity as people will keep wanting to build and reside in houses. Homebuilders will have to replace the old infrastructure while new houses and buildings are constructed. 

It might be the best time to invest in the construction business since it is still not getting the attention of investors. Some of the big names you should look for in house building are as follows: 

  • LGI Homes (LGIH);
  • Lennar (LEN);
  • D.R. Horton (DHI);
  • Pulte Homes (PHM).

Perry Zheng, CEO & Founder Cash Flow Portal

Author

  • Jerome has worked for an international real estate magazine in the past before joining Prudentialcal. He now spearheads our team of writers and ensures the quality of content we produce weekly.

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