Make Money with Real Estate Investing in 2023

Will 2023 be a year of recession? While the likelihood depends on who you ask, it is true that there has been a gradual reduction of demand in the real estate market. Many investors welcome the slowdown after a few straight years with homes selling well over market value. As the real estate market levels out, now is the time to consider how you can leverage it to make money. Learn why you should consider investing in real estate in 2023 and check out a few of our favorite strategies.

Key Takeaways

• Investing in real estate in 2023 allows you to generate passive income and establish financial freedom.
• Real estate investing offers many benefits, including the ability to hedge against inflation and the opportunity to build equity.
• Buying your own home and creating a rental strategy can be an excellent way to break into real estate investing.
• A slowing real estate market typically means more foreclosures and fewer buyers, giving investors more negotiating power.
• Both short- and long-term rentals can generate passive income if you choose the right location.
• Sign up for Infinity Investing’s 360 Pro membership to access many resources for real estate investing.

Why Invest in Real Estate in 2023?

Real estate is an excellent opportunity to generate passive income and establish financial freedom. Unlike more volatile investments, real estate tends to maintain its value over the long term. Recent economic events also make real estate investing a great option in 2023. Stock market returns have been smaller than in previous years, and many Americans are uneasy about banks after the recent banking crisis. You may be searching for other investment opportunities, and real estate is an excellent one to consider.

The inevitable slowdown of the housing market also makes 2023 a great year for real estate investing. The real estate market has been strong for the last couple of years, leading to multiple bids on a single property and bidding wars that often drive the selling price way up. Recently, however, higher interest rates and the possibility of a recession have slowed buyer demand. 

Investing in real estate in 2023 will allow you to:

• Generate consistent monthly income.
• Hedge against inflation.
• Build equity you can use to acquire new investments.
• Earn a passive income that doesn’t always require hands-on work.
• Diversify your investments.
• Use tax benefits to reduce your taxable liability.

How To Make Money in Real Estate in 2023

There are many ways to make money in real estate. Here are a few of our favorite options:

Buy Your Own Home

Buying your own home is one of the first steps toward investing in real estate. Homeownership is an investment that allows you to build equity, which you can eventually use to purchase more property. You’ll also usually qualify for better rates and tax benefits while renovating or repairing if you own the property. 

The Buy, Rehab, Rent, Refinance, Repeat (BRRRR) Method is an excellent way to start investing in real estate. It involves buying and flipping a property, renting it out, building equity, completing a cash-out refinance equity loan, rolling the cash into a new property, and repeating. If you’re okay with moving frequently and living in a home with ongoing renovations, this may be a cost-effective strategy for you.

Follow Market Trends

The real estate market has been highly competitive for the past few years, driving up home prices and causing many bidding wars. Many consumers had to pay over market value for their homes and ended up with high mortgage payments. Investing in these properties can be a win-win if you find the right opportunity. You can acquire new properties at a more affordable price while helping homeowners escape a difficult financial situation they can no longer afford.

Following market trends can also give you an idea of what to expect. As the housing market slows, homes sit vacant longer before selling. Bidding wars are also less common, with higher interest rates driving up home costs. This gives you more negotiating power and allows you to acquire new properties at a competitive price. Foreclosures are also likely as demand for homes decreases. Foreclosures may be a lucrative option for real estate investors since you can usually purchase them far under market value.

Opt for Short-Term and Vacation Rentals

The tourism industry continues to rebound after the pandemic, with a record number of people traveling. A recent survey found that 49% of people plan to travel even more in 2023. Short-term and vacation rentals are a unique investment because you can charge more per night than a long-term rental. People are typically willing to pay more for a vacation rental overlooking a beach or in a tourist destination than they would for a long-term property. You can also adjust your nightly rate based on seasonality and demand. 

Investing in short-term rentals also allows you to diversify your investments. Decreasing demand and prices for long-term rentals aren’t always congruent with short-term rentals.

Flip Houses

Flipping houses is a real estate strategy that involves buying a home in need of repairs, renovating it, and then selling the property for a higher price. Some investors may also purchase a damaged home, make the necessary repairs, and then turn it into a rental property.

If you choose the right home in the right location, flipping it can be a profitable real estate investment. Finding these properties in highly desirable areas can be a great way to generate revenue quickly if you have the skills or resources to make repairs or improve value. 

Flipping houses also allows you to take advantage of tax benefits, such as a 1031 exchange, which lets you swap one property for another similar one while deferring taxes. Foreclosures or bank-owned homes tend to be good flip projects since they often require repairs or updates. Fannie Mae reports a strong start to the 2023 real estate season but claims it’s unsustainable. It also predicts a recession in which high-interest rates and mortgages aren’t congruent with income levels, often a sign of coming foreclosures.

Invest in Long-Term Rentals

A long-term rental can give you a consistent income while also allowing you to build equity. As foreclosures increase, the demand for rental properties will follow. Additionally, many people have been unable to buy in the past few years because of the competitive market, keeping the demand for long-term rentals at a consistently high level. High-interest rates have also prevented many potential buyers from entering the real estate market.

One of the advantages of long-term rentals is that they tend to be a passive investment. Unlike a short-term property, long-term rentals are typically unfurnished. You will usually have to cover repairs, but if you budget for it ahead of time, you can easily handle them. Additionally, some investors may choose to hire a property manager to oversee their rental properties.

Buy and Rent Mobile Homes

Many real estate investors overlook mobile homes, but this type of investment can be highly profitable. Mobile homes are in demand as they’re among the few living options that are still affordable for many people. Mobile home living is also very common in southern states for retirees. Mobile home investing may require alternative funding resources, but with a little extra work, it can prove to be a valuable investment.

Invest in Real Estate Investment Trusts (REITs)

REITs are an ideal real estate investing strategy if you don’t want to own or manage a physical property. Investing in REITs allows you to put your money into a company that owns or manages real estate. With a REIT, you don’t have to find the perfect property, negotiate pricing, organize repairs or renovations, or find renters. A REIT is also another useful way to diversify your investments within real estate. However, investing in a REIT may limit your income potential since you have little control over investment opportunities.

Set Up an Asset Protection Strategy

Setting up an asset protection strategy helps you keep more of the money you make through investing in real estate. How you structure your real estate assets affects your liability from creditors and lawyers. Real estate investing also comes with many tax benefits, and having an in-depth understanding of these benefits can help you reduce your taxes. Learning to preserve, protect, and prosper is an essential component of investing in real estate.

Sign Up for Our Paid Membership Today

Do you want to learn how real estate investing can help you build wealth in 2023? Infinity Investing has all the tools you need to choose the right investment, create a lucrative strategy that generates passive income, and help you prepare for taxes. Sign up for a 360 Pro membership today to access tools, workshops, videos, and a community of expert real estate investors. Membership will also unlock access to our Infinity Investing mastermind group, where you can learn from other real estate investors who have successfully used these strategies.