Do you know the best way to grow your wealth? Ask a few millionaires, and 90% will say to invest in real estate. While this sounds like great advice, there’s just one problem. You need to know how to make money in real estate.

Luckily, there are several ways you can make money when investing in real estate. This allows people of all backgrounds, income levels, and stages of life to invest in real estate.

This guide will show you five ways you can make money when investing in real estate.

1. Single-Family Homes

This is often seen as the best way to make money in real estate. People buy homes and then rent them out to long term residential tenants.  The security in this plan is that people will always need a place to live.

The catch is that you either need to buy the homes outright or find a favorable mortgage. You can then use the monthly rent to pay for the mortgage. This funds your investment long term while your property appreciates.

2. Turnkey Properties

If you’re new to real estate investing, then buying a home and fixing it up for rent may be a bit much. Instead, a turnkey property has all of the work done for you. With a minimal down payment and good credit score, you can buy one of these properties.

The company you buy it from will have already done all of the work to get the house ready for renting. They may even offer you management services to make the landlord role easier.

3. House Hacking

With this method, you can buy a multi-family home and live for free. By renting out the other residences on the property, you can pay the mortgage. In the end, you’ll own the multi-family residence outright.

Then you can put the rental income towards a down payment on a second property. Use this method to increase your property portfolio without pulling money from your own pocket. Just be sure to read this post about protecting your home once you’ve purchased it.

4. Real Estate Investment Trusts

If you want to invest in real estate, but don’t have the time or financial resources, then a REIT can be a smart option. With this method, your money gets pooled with several other investors.

A management company will then use the pooled money to purchase real estate. No one investor will own the property, as the trust is the actual owner. However, everyone that contributes money to the trust will profit from the buying and selling of real estate.

You Know How to Make Money in Real Estate

Now that you’ve read this article, you know how to make money in real estate. By putting these different methods into practice, you can create several revenue streams. Then by building your wealth, you can invest more and further grow your investments.

Browse our other articles for more helpful advice on how to make money investing.