Buying and owning real estate is an investment strategy that can be lucrative and satisfying. Here are a few ways investors can make money from properties. 

Rental Properties

Owning rental properties is ideal for people who have DIY skills and can manage tenets. It offers a regular source of income. Plus, many expenses associated with owning rentals are tax-deductible, while losses can offset any gains. Additionally, these properties tend to appreciate over time, leaving owners with a more valuable property than they originally purchased. It is especially pleasing once you get to the point where you no longer have to make mortgage payments. However, you need a substantial amount of capital upfront to cover the costs of renovation and get you through periods of vacancy. You may also have to charge less rent during times of economic downturn. On top of that, rental properties can cause constant headaches. Tenets can even damage properties.

House Flipping

House flipping is the wild side of real estate investment. People who do this are distinct from those who buy and rent properties. Flippers usually look to sell their properties for a profit soon after they buy them. There are two kinds of flippers. The first are those who look for properties that are ready to resell but are underpriced. These flippers want to sell properties as soon as possible and often cannot afford to pay the mortgage if they end up keeping a house for too long. This can lead to continued financial losses. The other kind of flipper is that who buys reasonably priced properties that need work and renovate them. This tends to be a longer-term investment, so these flippers may only have one or two properties at a time.

This is a great option for people who have experience in real estate, marketing, and renovation. It takes a lot of capital upfront to get started and you will probably want to have some DIY skills. Flipping is great if you are looking to hold properties for a short period. In the time it takes to resell a house, you can have significant returns. However, this will require a deep understanding of the real estate market and luck. If the market suddenly tanks, you could be stuck with a significant loss or a rental property that you didn't want.

Flipping is also a great idea for those who are looking to invest in commercial properties. For example, accomplished real estate investor, Will Obeid, has had success turning properties with unique natural features into high-end wellness-focused resorts. In 2014, he even started his own company specifically so he could continue to invest in these properties. Through this company, he has acquired many properties, including the Minnewaska Lodge in New York, and turned them into boutique-style adventure and wellness resorts. 


Real estate investment groups are like mutual funds that invest in rental properties. Typically, a company buys or builds apartments or condos, then allows investors to purchase them through the company and join the group. An investor can buy one or many of the living units, but the company that started the group takes care of maintenance, advertising vacancies, and interviewing tenants. In exchange for these tasks, the company takes a percentage of the monthly rent. The lease will generally be in an investor's name, but all of the units will pool a portion of their rent to guard against vacancies. Because of this, you can still receive income when your unit is empty. However, if the vacancy in the group's units spikes too high, there could not be enough money to cover the costs.

This is ideal for people who want to own rental properties without the hassle. To get into this, you will need a financial cushion and access to more funds. These groups offer a much more hands-off approach to renting units but still provide a steady income. However, there tends to be a larger vacancy risk. Plus, these groups are vulnerable to the same fees in the mutual funds' industry. On top of this, sometimes a management team for a group is corrupt and will cheat investors out of their money. Therefore, you must perform adequate research about a group before you decide to join it.


A real estate investment trust is created when a corporation uses money from investors to purchase and operate income properties. These are great for people who want to own rental properties but do not want to purchase real estate. They are essentially stocks that payout to investors. However, it can take a lot of investment capital to join a trust. This is because joining the trust is like buying stocks, so you cannot take out a mortgage. Similar to REITs there's also e-REITs such as Fundrise and Diversyfund, both of which are good choices if you want to invest in a REIT but don't have a brokerage account or simply prefer the slightly higher returns they offer.

Whether your real estate investment strategy involves owning rental units or selling fixer-uppers as quickly as possible, this is an industry where you have the opportunity to make a lot of money. Just keep in mind that there is always a risk whether you decide to become a landlord, flip houses, or join an REIG or REIT.