Real estate investing is one of the best ways to make money both in the short-term and in the long-run. However, many people refrain from this profitable opportunity as they erroneously assume that it requires a lot of time and can’t be done on a part-time basis.
The truth of the matter is that there are many ways in which you can start making money from real estate as a side hustle without leaving your 9-to-5 job. Here are the top four:
1. Renting out a Room in Your Home
One of the best strategies for becoming a part-time real estate investor without having to buy an investment property is to rent out the extra space in your home. If you live on your own or just with your partner, chances are you have a room or two that you don’t use.
Even if you live in a rental property, you can sublet a part of it as long as your leasing agreement allows this. The best way to do that is to rent out the room on a short-term basis through a website such as Airbnb.com, HomeAway, or VRBO. After the establishment of Airbnb in 2008, the home-sharing industry has been absolutely revolutionized, allowing common people to make a few hundred dollars a week or a month – depending on their location – without owning a second home.
This strategy for making money in real estate as a side hustle has two major benefits. First of all, it requires no capital as you are not buying a new property. Second, it’s a great way to test if you have what it takes to be a property investor as you can try out the rental business without a long-term commitment.
2. Real Estate Crowdfunding
The recent advancement of social media and digital technology has given rise to another wonderful way to make extra income in real estate without buying an entire property. In 2010, Fundrise combined the concepts of crowdfunding and real estate investing to create a platform where you can pull your resources together with the capital of hundreds of other small-scale investors from around the globe to own large real estate assets.
Unlike renting out a room in your house, this is a very passive real estate investing strategy which makes it perfect for busy professionals. All you have to do is choose which platform to invest in, after which you start receiving dividends. Another great advantage of real estate crowdfunding is that some platforms allow you to invest as little as $500. This makes crowdfunding the cheapest and most affordable way to enter the exciting world of real estate investments.
3. Real Estate Syndication
Another more traditional way to become a part-time property investor is through a real estate syndication. This is a formal real estate partnership comprised of two main parties. The syndicator – or sponsor – invests only about 5% of the property value, but he/she is responsible for researching the housing market, doing the property search, choosing a profitable opportunity, buying the property, and managing all aspects of the rental business.
Meanwhile, the second party – the investors – provide the majority of the funds needed to purchase the investment property. However, they have no active role in the real estate investment business, which makes syndication another way of making passive income in real estate. An important benefit of this strategy is that you actually own (a part of) an investment property, so you make money in the short-term through rental income and in the long-term through real estate appreciation.
Another major advantage of syndication as an investment strategy is that it is scalable. The same group of people can buy as many properties as their finances allow. Indeed, you can use the income from the first property to save up for a down payment on the second and so on and so forth to enjoy the “snowball effect” in real estate investing.
4. Buying a Rental Property
Last but not least, making money passively as a side hustle is possible even with buying and owning a rental property on your own. The emergence of real estate investment apps allows investors to conduct quick and efficient real estate market analysis and investment property analysis to choose the best market and property for sale within their budget. Those who want to focus on single family properties also have tools available to them.
Such platforms eliminate the need to conduct three months of research, which real estate investors used to require to find a profitable opportunity. This means that you can buy a top-performing investment property from the comfort of your home or office while keeping your full-time job.
In addition, buying a rental property doesn’t necessarily mean becoming a landlord or an Airbnb host. There are numerous professional rental property management companies that will take care of all aspects of managing and renting out your property while you enjoy the passive income with your family.
One of the best things about real estate investments is the endless opportunities which you have as an investor. Depending on your time availability, budget, skills, experience, expertise, and commitment, you can find a strategy appropriate for you. Making money in real estate while continuing to work your 9-to-5 job is absolutely feasible with the four best ways discussed above.
About the Author
Daniela Andreevska is Marketing Director at Mashvisor, a real estate data analytics company. She has been writing about the real estate industry for over four years. Daniela has previous experience in economic policy research and fundraising.