How to make money on real estate without investments and from scratch: a few simple schemes

Risk assessment for real estate business

Before making money on real estate, you should take into account all economic indicators and think about the risks. As a rule, it is unforeseen circumstances that can destroy a business or significantly undermine its well-being. Experienced entrepreneurs pay attention to the following threats when drawing up a plan:

Economic. These risks are associated, first of all, with the rise in prices of decorative items and furniture. If the property is damaged by guests, the owner will have to pay for replacement, since the fine usually does not exceed 50% of the cost of the goods.
Legal. Indeed, the cost of completing a package of papers can cost a large sum, so you should consult in advance and find out about prices.
Architectural and construction. The risk falls only on the structure itself, that is, the building. If any deformation occurs, the room will need to be urgently restored.
Administrative. Fines for improper business conduct based on violations of SanPin and other regulations.

Business payback

The speed of making a profit depends on whether the agency has clients right away. This is acceptable if the staff includes specialists with experience and connections.

To determine income, consider the basic areas of spending:

Employee salaries depend on experience and type of activity. More often than not, agents' income depends on the work done, but the rate is also set. It is unacceptable for the minimum wage to be lower.
Renting an office, if there is one, costs between twenty and thirty thousand.
The technical equipment of the office will cost one hundred thousand.
Software and marketing are monthly expenses in the range of forty thousand rubles.

The profitability of a business depends on the professional training of the staff and the direction of activity. The profit from selling is higher than from renting. Real estate for businesses is purchased by people who want to have additional income. If a person has two or more apartments, then he prefers to hire a realtor.

With consistent and dedicated work over a year of activity, it is possible to break even and start making a profit. The danger lies in active agents leaving the company and either working as freelancers or starting their own businesses.

Opportunity to start a real estate business without start-up capital

Earning money from real estate is also available for beginning entrepreneurs who do not have start-up capital. As a first step, you need to find a room, which can be:

Personal garage.
Own apartment.
Dacha.

Next, the first capital is earned, based on the rental price paid by the guests. Housing conditions should be gradually improved and the cost of living should be raised. After a few months, it will be possible to rent a room and open a real estate agency there.

Attention! If you don’t want to wait several months for profit, then you should consider the option of lending. Banks have special lucrative offers for entrepreneurs.

Real estate investing: pros and cons

Investments in real estate are considered reliable, but not the most profitable. Their main advantages:

Real estate is a real, tangible object that has objective value: you can live in it. Most investors believe that over time their real estate will rise in price.
Real estate can be rented out and receive monthly passive income.

Disadvantages of investing in real estate:

Not all real estate and does not always increase in price. There are downturns in this market. Also, the potential for price growth depends on the liquidity of the object. You can buy an apartment (room, house) and sell it a few years later for the same price or even cheaper. Read the real estate price forecast for 2020.
If the property is idle, utility bills must be paid for it.
Difficulties with rent. Renting a home can be difficult. There may be problems with tenants.
Income from real estate is usually low and not entirely passive. Even in a good situation, the rental yield (the ratio of annual income to the cost of the property) is low and rarely exceeds 5%. A bank deposit brings approximately the same profitability. At the same time, problems with real estate still need to be resolved (looking for tenants, showing the apartment, making repairs).

If an apartment was inherited and it is “extra,” they usually leave it and rent it out in the hope that over time it will be worth more. You can do the same thing with a house, but it’s more difficult to rent it out and sell it. And buying investment property with a mortgage is not at all profitable: mortgage payments are almost always higher than the rental rate. The investor will not only have to make repairs, look for tenants and solve related problems, but also pay extra to the bank from his own pocket.

All of the above is true for traditional real estate investment schemes. They more or less work for liquid properties (small apartments), but do not bring high returns to the investor. The profitability of real estate investments increases significantly if you apply the investor approach.

The best ideas for a real estate business

In foreign countries, as in Russia, the leasing of commercial real estate is quite well developed. Against this background, a large number of ideas have emerged on how to make money on commercial real estate and earn your first profit based on the purchase and sale of premises.

Renting out apartments

Renting out commercial real estate as a business is a profitable solution. The cost of living per month can reach the average salary in megacities and cities with a population of over one million people. This will cover the owner’s expenses for food and family maintenance, and will also allow him to set aside money for the purchase of another property.

Renting premises is a profitable business

Garage rental

You can rent a garage from neighbors or friends and open your own workshop there, or vice versa - rent out your premises for the same purposes. Car repair shops are in demand, so the amount requested by the owner for renting a garage can reach a month’s salary or more.

Attention! The cost of renting the premises must correspond to its interior decoration.

Resale of apartments and houses

As a business, this is a fairly profitable and profitable option, but it has some pitfalls:

The real estate market is constantly becoming more expensive, so the amount received for the sale of one apartment can quickly depreciate in order to buy another.
Making a profit is quite difficult due to the instability of supply and demand in the real estate market.
A large number of documents that will have to be completed for each transaction.

Constant resale of real estate brings profit

Daily rental

The best way to start a real estate business is with daily rentals. This option will allow you not only to receive income on a daily basis, but also to rent out the premises continuously, since guests will not need much time to settle down or move. This option is relevant only in megacities that have a large number of historical attractions and cultural heritage.

Attention! It is more profitable to organize daily rentals in places where tourists gather.

Sublease of real estate

Owners of large real estate often tend to rent it out to one user. Having thus received the right of temporary use, you can make good money by subletting this property in parts. And if, for example, a house or multi-room apartment is located near train stations or close to markets, then you can introduce a daily, or even better, hourly payment for this housing and at the same time the income will increase by 2 or even 3 times.

Here you need to show agility in order to select such a property in a prestigious area and competently conclude an agreement so that the tenant does not object to subletting and does not change his decision over time.

Starting a real estate business

Understanding how to make money on real estate is quite simple, but questions often arise precisely at the stages of drawing up and implementing a business plan. To properly organize a business, it is important to consider several significant points:

Choosing a field of activity. A real estate business without starting capital is possible in different areas, which includes purchase and sale, rental of premises on a daily basis and on a long-term basis. Before starting your own business, you need to choose one area, and then, if you successfully make a profit, expand and cover other types of activities.
Documentation. Preparing documents and signing contracts is an endless attraction that entrepreneurs find themselves in at the first stages. Standards and requirements vary for representatives of different areas of business, so before making money on real estate, it is important to consult with specialists on the documentation issue.
Business plan. Making money in real estate without investments, like any other business, requires drawing up a well-thought-out business plan. It takes into account risks, fixed and temporary costs, and income in different periods. If an entrepreneur is new to business, then you can contact special companies that are engaged in drawing up such plans.
Advertising. It is easier to make a big profit when there is advertising for the enterprise. Through social networks, banners and leaflets it is easy to tell others about the services provided. There are also people who promote businesses in the Internet space. This somewhat costly action will pay off in full with the arrival of new clients.

Advertising is a step on the path to success

Purchase of unfinished real estate for the purpose of sale after its commissioning

The idea is to take advantage of the offers of many construction companies who, in order to attract investment to complete the construction of apartment buildings, and buy an apartment in the early stages of construction. Moreover, there is a direct dependence - the sooner you start cooperation in shared construction, the more significant the benefit will be in the final result.

The final market price of such real estate after it is completed and put into operation will be no less than 70-80% more than the initial investment. But there are two significant drawbacks - you have to wait a long time for a return on investment (up to 2 years) and there is a high risk of unfinished construction, which is now a common threat.

How to start earning money from scratch and without investments

Experienced entrepreneurs often share tips on how to make money in business. If you combine the recommendations into one whole and analyze, you can see two schemes that work in 90% of cases.

Credit-Grace Ring

This scheme assumes the presence of a credit card in the first stages of business. Banks provide a special card that is available for a certain period. The advantages of this approach will be:

Constant access to a credit card without paperwork and loss of time.
Availability of an interest-free period of use, which is agreed upon with bank representatives.
Low probability of refusal to receive a credit card.
The ability to invest and track income/expenses through the connection of a special application.

Investing in a home: advantages and disadvantages

Advantages of an apartment building for an investor:

Cheap square meters to buy. The cost per square meter of a house is usually 2-3 lower than the cost per square meter of an apartment. This makes investing in a home profitable.
Expensive rent. The cost of renting apartments and studios in an apartment building is the same as in a regular apartment building. It is most profitable to rent out small-sized studios. Even compared to one-room apartments, with long-term rental, the income from each square meter of a studio is 1.5-2 times higher.
Large trade. You can get a discount of up to 20% on your home. Because houses are difficult to sell, their owners often make concessions.
Monthly income from the second month. You can complete the redevelopment and move in the first residents in just a month and a half if you know the secrets of investor renovation.
Possibility to start without investment. You can buy a house with someone else's (borrowed) money, and the cost of repairs can be included in the purchase price.
Financial stability. There will be many studios in the house. Even if some tenants move out, the investor will not have to pay the mortgage out of his own money.
No neighbors. No neighbors - no problems with them. Unlike apartment owners, homeowners can remodel as they please, move “wet spots,” etc. No one will complain about frequently changing tenants.
There is a plot of land. A plot of land near the house provides additional benefits. Firstly, it creates the illusion of outdoor living for residents. There you can put a barbecue, chairs, an inflatable pool, etc. Secondly, the investor can build another building on the site (for example, a modular house) and also rent out studios there.

Disadvantages of an apartment building:

It’s difficult to take out a loan for 5-15 million rubles without a down payment. The difficulties here are both psychological (it can be difficult for people to decide on this, because many perceive a loan as “bondage” and do not understand the possibility of using leverage for an investor) and financial. If a loan is not given, there are different ways out: the services of a mortgage broker, correcting your credit history, urgent employment, attracting funds from investors, etc. As practice shows, with a strong desire, all problems can be solved.
This strategy does not work equally well in all regions. Before you buy an apartment building, you need to test demand and calculate the ratio of income and expenses. Practice shows that there are almost no cities where apartment buildings are unprofitable (usually these are very small cities with unclaimed and very cheap rent). In the vast majority of regions, the strategy works and generates income, but specific financial results may vary depending on the region.

The advantages of the apartment building strategy far outweigh the disadvantages.

How to get a stable cash flow

In order for the cash flow from an apartment building to be stable, it is necessary to ensure maximum occupancy of the studios. If the object is chosen correctly, there should be no difficulties with residents. Investors conduct a strict casting among those wishing to rent studios and often only accommodate people of the same age category in order to avoid problems between neighbors.

If the investor has chosen a daily rental strategy, the potential profitability of the house is higher, but in this case it is necessary to constantly advertise, show studios, and rent them out again and again. This option is suitable for businessmen, not passive investors.

Apartment house project

The apartment building project includes:

financial plan with calculation of the break-even point of the project and the maximum amount of income taking into account all expenses,
plan for redevelopment of an ordinary private house into an apartment building with 5-20 isolated studios.

Watch the video on how to buy an apartment house without investing your own funds:

The project of this apartment building includes inflating the price of the property, which allowed the investor to cover the down payment and the cost of repairs. The investor plans to receive 200,000 rubles in net profit from the house.