Investing in real estate doesn’t mean you must have a real estate license. Millions of investors don’t, yet they are successful in their endeavors. Real estate agents have a license because they help others buy houses. If instead, you invest in the properties yourself, you don’t need the license.
Here are our favorite ways to make money in real estate with no license.
Fix And Flip Properties
If you love a good hunt, find run-down properties listed at below market value and snatch them up. Now it will be up to you to fix the home up (or you hire contractors), but if you have a keen eye for what buyers want, you can inflate the property’s value significantly, walking away with a decent profit.
- You can make a quick profit
- You’ll learn a lot about construction, renovations, and what the market wants
- You’ll grow your network of real estate contacts that may help you in future real estate transactions
- You may run into unanticipated costs once you start renovating
- You’ll need to do a lot of market research to make sure a property is a good investment
If you have a large network and can negotiate well, wholesaling properties may be a great way to make money in real estate with no license.
When you wholesale properties, you don’t take possession of a property, instead, you act as the middleman. Wholesalers must have great negotiating skills because the idea is to enter a contract at a lower price, find a buyer who will buy it from you at a higher price and you pocket the profits.
- You need very little capital to start
- You can make profits in a short time
- You can learn a lot about the real estate industry
- It’s not always easy to find a buyer
- The profits are unpredictable
Buy And Rent Out A Property
If you aren’t into rehabbing properties, you can buy a property, keep it, and rent it out. You don’t need a real estate license to buy properties and/or rent them out. But you do need to do your due diligence to make sure you’re buying a property in an area that renters want to live.
You can buy a property in great condition or properties that need a little TLC to make them attractive for renters. The monthly rents earn you cash flow if the rent exceeds the mortgage and maintenance costs.
- If you price it right, you could make a decent profit
- It’s a great way to diversify your portfolio
- Real estate is tangible (and can be sold) if necessary
- You’re at the mercy of the market, if it falls, you stand to lose money
- You could face many vacancies and/or non-paying tenants
Buy Short-Term Rentals
If you’d rather not deal with the unknowns of long-term leases and tenants, consider short-term rentals. Today more people look for homes to rent on vacation rather than staying in a hotel. Just look at the success Airbnb has had.
If you’ll invest in an area that’s popular with travelers or college students, you’ll have higher occupancy rates and reduce the risk of periods of loss.
- You can set fluctuating rates based on the market at the time
- There’s often less wear and tear on the property
- You aren’t stuck with any specific tenants long-term
- There are often many more maintenance and repair requirements as short-term renters aren’t as careful as long-term
- Your income could fluctuate
Partner With A Real Estate Agent
Just because you don’t have a real estate license doesn’t mean you can’t partner with someone who does. When you work with a licensed agent, you’ll have access to the MLS listings and have an ‘insider’ able to tell you when something hot hits the market.
Trying to navigate the latest listings and available properties yourself is a big job. When you let a professional do the work, you stand to make more money. Even though you have to pay a real estate agent his/her commission, it usually pays off in the end.
- You save time and effort trying to find the right properties to buy/invest in
- You have another set of eyes watching the market for you
- Real estate agents give you access to more properties than you could get yourself
- The real estate commissions can be hefty
- You have to rely on someone else’s schedule
Real Estate Investment Trusts
If you don’t want to own real estate physically, but love the returns it offers, consider investing in a Real Estate Investment Trust. This tradeable asset is like crowdfunding for real estate but it trades on the public market.
You and other investors pool your money together to fund a real estate project. You earn divided based on the property’s performance or the investor’s repayment schedule and the amount of your investment.
- You don’t need a lot of capital
- You can invest in commercial real estate by pooling money with others
- You don’t have to do the maintenance and repairs
- There’s no guarantee of a positive return
- You don’t have a tangible asset
You Can Make Money In Real Estate With No License
There are many ways investors can make money in real estate. It’s a great way to diversify your portfolio rather than relying only on the market. With a diversified portfolio, you offset the major losses by not having all your eggs in one basket.
Think about how you want to invest in real estate and see what’s required. Most investors start with very little capital and then build their portfolio as their investments grow. It’s a fun way to invest your money and set yourself up for retirement or other large financial goals.