Flipping Houses, Rehabbing, and Landlording: Who Makes the Most Money Investing in Real Estate?

There are many ways to make money in real estate. Two popular and proven ways are flipping houses and landlording. Often, both of these methods involve fixing or rehabbing the property for higher profits.

Flipping Houses to Make Money

House flippers pick up property at a low price and quick turn it for a profit. Different strategies for flipping houses include:

1. Turning Contracts. Many investors find a bargain house owned by a desperate seller and get a contract to purchase. They then sell the contract to another investor or to a owner-occupant home owner. This method requires great negotiating skills and knowledge of the current market. You must know how to move the contract or you make no money and unfairly tie up the home owner. Successful flippers repeat the system over and over: contract, sell, buy--and make modest gains on each transaction. This method helps beginning investors make quick money to get a bankroll to buy more houses.

2. Buy Ugly Houses, Fix and Flip. Another flipping method is to purchase bargain property either with financing or cash. In this strategy, the flipper becomes the fixer and makes the money that the investor would make in the "turning contracts" system.

3. Buy Pretty Houses and Flip. Not all bargain houses are fixers. You can find sellers whose homes are in perfect condition but their personal life makes keeping the house impossible. The key to getting a pretty house from a needy seller is to be ready to cash the seller out with pre-arranged financing or cash.

Landlording to Make a Fortune

Wealthy real estate investors buy properties as long term investments. Rent brings in a consistent, positive cash flow if the properties are purchased at the right price and rented for maximum profits. Investors frequently fix up the properties for higher rents. Not only do the landlords receive cash flow each month, they get tenants to pay the mortgage for them and over time the value of the property appreciates.

Both flipping and landlording make money when you buy low, rent smart, and sell for top dollar. However, over time, landlords make the fortunes investing in real estate.

Free ebook: The Truth about Making Money Flipping Houses at http://www.doghousetodollhousefordollars.com

Author Jeanette Fisher teaches real estate investing, home staging, and interior design methods to make more money renting and selling houses at Lake Elsinore Real Estate.

Jeanette J. Fisher