You know, I’ve probably had more people ask me whether they can make money in real estate than anything else. The truth is that it’s not rocket science.

One thing that you should understand is that all businesses work using the same three principles.

1) Purchase a product or service at a set price
2) Sell the product or service at a higher price than it is purchased for
3) Achieve this in a measurable time period

In order to make money real estate investing, there are two basic things you need to clearly understand.

a) How to Buy Real Estate

Real estate rarely sells for a significantly higher price than it costs to purchase. That means the first step to making money real estate investing means knowing how to buy property for less than market value. Making money real estate investing is both an art and a science but there are repetitive techniques that will help achieve this with regularity.

The first key to making money real estate investing is to learn to buy your equity. Later, we will sell that equity and it will produce real tangible cash. Most new investors think that you make money when you sell the real estate. The truth is that your money is always made when you buy.

Most products and services have an average profit margin of 8% after all expenses are considered. Some more profitable products have profit margins in excess of 30%. Because of the huge cost of buying real estate, a 30% profit margin for the average investor can be more than a lot of people earn in an entire year. What you don’t achieve in volume you will make up for in the large profits produced by one deal.

If you understand how to buy a product for less than market value and there is a demand for it, you can always produce a profitable business from that venture. Real estate simply works because there will always be a demand for places to live.

b) How to Market Real Estate

The truth is that 90% of any business is marketing. Having your properties sell for full price quickly and often will help you cash out that equity and get paid. The key to making that happen will be in your marketing efforts. Unfortunately, because most businesses don’t understand marketing, this key lesson eludes them. If you comprehend creative marketing techniques, any type of business can work.

Consider the obviousness of this example. Which one of these advertisements is more likely to garner a lot of attention?

123 XYZ Road – 3 Bed/2 Bath

or

3Bedroom/2 Bath Home – Must Sell $1000s Below Market

While it may be obvious, look at the different property advertisements and you’ll notice that few people incorporate good marketing into their campaign.

So, can you make money real estate investing?

Of course. If you work smarter and harder, it’s literally impossible to fail. The real benefits though are the skills required to master making money real estate investing are completely transferable. Learning to buy a product with high demand for less than the market value combined with good marketing skills will make you successful in any business. It absolutely imperative for you to learn both of these skills and you can make money real estate investing.