2020 is poised to be a good year in real estate with home prices still steadily on the rise.
If you’re willing to put the work in, you’ve got the time, and you’ve got the capital, there are a lot of ways you can see big profit in real estate in the coming year, as this guide from My Wealth Solutions claims.
Keep in mind, real estate profit often takes a few years to mature. Still, there are instances when you’ll see some level of profit by the end of the year.
1. Buy A Rental Property
The size of your rental property will have some bearing on whether or not it makes you profit by year’s end, or within a few years.
For example, if you buy an apartment building that includes eight units you can rent out, and you clean up the premises well enough to charge $1k per month per unit, that’s $96k a year.
If the building cost $500k, plus $100k in refurbishment, repairs, landscaping, marketing, hiring, and legal fees, then it’ll take you six years and four months to pay off your initial investment—provided you paid all at once.
After that, figure out what annual maintenance percentages are and deduct that from yearly earnings. It’s not inconceivable you’ll see $50k profit a year once taxes, incidentals, and other costs are factored in.
Within ten years, you’re $200k richer. Within twenty, you’ve more than doubled your total investment.
Smaller buildings can be lucrative too, and you can even supplement income or reduce your mortgage burden by inviting a tenant to your existing property.
2. Expand Property Value With Additions
You can build a tiny home in your backyard for $20k from an Amazon.com kit. You could probably build a bigger one cheaper and more qualitatively by working with local friends and contractors, or going the DIY route carefully and slowly.
If there’s an alley near your backyard, you can install a mailbox with your address plus “1/2”, a gravel driveway, and make it a cottage you can rent out.
Or it could be a man-cave. Or it could be a workshop, a storage shed, or a separate bedroom for friends visiting.
Whatever you do with it, if you construct the extra building right, it will expand the total value of your property.
3. Find A Broken House And Flip It
This option is a bit more straightforward, but the specific 2020 application pertains to a couple of cities in Australia, where you can buy a house that has everything in working order for $5k; or get a home for $1k under the stipulation it’s made livable inside six months.
In the case when half the population has left that city you can find your opportunity. If you throw $10k into it, you could sell at a mild profit while deferring rent costs.
This is if you’ve got very few resources available. Still, if you’ve got some real resources, you might buy an “as-is” property, or obtain one at auction, then fix it up and resell it at a higher profit than going with some foreclosed home.
This, of the three options, is the most likely to get you the most profit the most quickly. Do the job right and you can earn more than a year’s wages just from flipping one house.
Examine local markets, local resources, and your own abilities. This year could be the year you get into real estate.
There are plenty of opportunities for real estate profit in 2020, and if you’re willing to commit yourself, you can certainly see a good end to your real estate investment.