Real estate is profitable, whether you’re buying and selling, renting, or getting involved in REITs. However, some pursuits are more profitable than others. In fact, many real estate professionals are pursuing mergers and acquisitions to combine forces and add value to existing companies.

Love real estate and want to know where the big money is? In this article, we’ll share some of the best ways to make the most money in the industry.

1. Buy and/or sell luxury properties

Luxury properties aren’t just expensive – they’re usually large, have exclusive amenities, like a tennis court, movie theater, bowling alley, or indoor swimming pool, and they are unique. Essentially, when people look at a luxury property, they know it’s superior to other options.

Another feature of luxury properties is that they are often located in wealthy areas with close access to luxury shopping, the arts, dining, etc. Sometimes, entire luxury communities are created in otherwise non-wealthy areas. For example, the Santana Row luxury apartments were built in an area that wasn’t affluent before Santana Row was built. These apartments rent for between $3,000 and $7,000+ per month.  

If you can afford a higher mortgage for luxury properties, it’s worth looking into because the returns are much larger than standard residential real estate.

2. Get into commercial real estate

Commercial properties generally produce a 6%-12% annual return, depending on factors like the location and the state of the economy. This is an excellent return compared to single-family properties that only generate between 1%-4% yearly.

When you own commercial property, you’re less likely to deal with expensive repairs caused by negligence since business owners tend to be more professional and mature than residential tenants. Business owners are emotionally invested in the property almost equally because it’s their source of income. They’re going to tell you when the plumbing breaks or when the roof leaks.

Another plus is that you’ll pay fewer property expenses with a triple net lease. For example, your tenants will pay the property taxes and you’ll only have to pay the mortgage. The fewer expenses you have to pay, the more profitable you’ll be.

3. Real estate blogger

Thanks to the internet, anyone can make money as a blogger in any industry without getting their hands dirty. Blogging isn’t for everyone, but if you’re someone who feels passionately about properties, you love to write, and you’d rather stay behind the scenes, this might be the perfect opportunity.

Blogging is profitable, but you need to come up with a good angle and produce industry-level, authoritative content. The only real way to monetize a real estate blog is through selling affiliate products and services, or by generating massive targeted traffic that is appealing to advertisers.

The market is pretty saturated, but you might be able to find a new angle or do something better than other blogs and win your audience that way. As an alternative, you could create a YouTube channel and become a real estate vlogger. If you have the knowledge and experience, you can earn money through monetizing your channel.

4. Fix and flip

Fixing and flipping houses has been popular for a while, and many people have made it a successful full-time business. There are even several house flipping TV shows, including one dedicated to helping flippers who are losing money and in over their heads (Fix My Flip).

Like all opportunities, fixing and flipping properties takes hard work. And it’s not going to be as profitable as earning a commission on the sale of a high-priced home. You can expect to make a profit of around10% to 20% after renovations. The main benefit of pursuing this opportunity is being able to turn over a finished product in a short period of time while outsourcing the hard work to other people.

If you can find a way to generate income by spending less time and effort, you’ll have more time to spend pursuing additional projects or living your life.

5. Airbnb

There will always be demand for Airbnb rentals, and the key to making a good profit as an Airbnb host begins with location. For example, in 2022, several thousand Los Angeles Airbnb hosts earned a collective $4 million during Superbowl weekend.

In addition to location, you’ll need to provide amazing, hospitable service where linens are always clean and the space looks and smells fresh.

Pursue one or several opportunities

Now you have some ideas for becoming profitable in the real estate industry. You can pursue as many paths as you like. However, you’ll be most profitable by choosing the opportunities you enjoy.