Last Updated on Dec 1, 2022 by James W

Once people buy their first home, some of these new owners realize that they can start investing in other properties for profit. They are usually thinking of buying places to rent out. Although this is a smart way to invest in real estate, it isn’t the only way. There are a number of options that people can look into and find one that suits their needs. 

Investing is not a one size fits all type of scenario even when investing in real estate. There are various ways that will work best for investors based on lifestyle, budget, and other factors. In this article, we will go over some of the popular ways to invest so you can decide for yourself which option is going to work best for you. 

1 – Rental properties

Buying properties to rent out is probably the oldest form of investing in real estate. It is likely the most popular because it is the most obvious way to go. The idea is very simple. You buy a property in an area where there is a big demand for rentals. 

It could be an area where there is a university as lots of students come and go every few years. Or, there could be other factors such as an expensive buyer’s market that prices people out of purchasing so rentals are popular. 

It’s a nice strategy since you can make it a passive income or be more involved and work at it like a job. If you want to make it passive then apartment management companies in Toronto will take care of your properties from finding tenants, to screening them, to maintaining the property. There is very little involvement on your part. 

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2 – Flipping houses

The opposite of a passive investment strategy is to flip houses. It is far more involved than renting out properties but people are attracted to the profits that can be made in a short time. 

The idea is that you find an area that is up and coming where there are still deals to be had. Then, you buy a fixer-upper that has potential. It is then refurbished and renovated to be transformed into a lovely property that can be sold for a big profit when the market gets hot for that area. 

It involves knowing how to do a lot of carpentry and other construction jobs. You can also hire contractors to do the work but this will be expensive and cut into your profit margin. 

3 – Airbnb

Very similar to renting out a property is to buy a unit for short-term rentals on Airbnb. It is a lot different, however, since the dynamic is different. Tenants are in for short stays of a few nights generally and are either tourists or business travelers. 

This can bring in a lot more money than a traditional rental if the conditions are right. If you live in a touristy area then this is a more logical choice over long-term rentals. 

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Article writer, life lover, knowledge developer and owner at youngmoneymakertips.com