Real estate investment can be a lucrative endeavor, but it’s also complex. A lot of people are interested in getting involved, but the most common questions are generally about the earning potential or, more specifically, what a real estate investor salary consists of.
We’ve put together this blog to break down the average real estate investor salary figures while also sharing some knowledge on how to make money in real estate.
A real estate investor is someone who buys property with the goal of earning a positive return on their investment. Incomes and profits can come from rental income, the resale of the property, or both.
There are two primary forms of real estate investors: namely, residential investors and those who invest in commercial real estate. The former focus on residential properties, such as single-family homes, apartments, vacation rentals, and townhouses. The latter deal with business properties, covering everything from warehouses and offices to apartment complexes and restaurant spaces.
A commercial real estate salary can be significantly higher due to the increased scale, however, commercial projects come with much higher degrees of risk.
When asking the question, “How much money do real estate investors make?” you won’t find a straight answer. In actuality, there is no “real estate investor salary” because, by nature, it’s a freelance job. The amount of money an investor can make varies and fluctuates based on a number of factors, including location, experience, market conditions, investment strategies, and more.
This being said, it’s not uncommon for a successful real estate investor to earn upwards of a six-figure salary, with earning potential theoretically unlimited.
According to data from the Bureau of Labor Statistics, the median annual wage for real estate brokers and sales agents (which includes many real estate investors) was $50,730 in May 2020. However, many investors can earn more or less than this figure.
When pondering, “How much do real estate investors make per month?” the amounts can vary significantly. Someone in the early stages of their career may only make a few thousand dollars a month, with long stretches of little to no income, while a more seasoned pro with a diverse portfolio can see income in the tens of thousands.
Region is also a major factor that impacts a real estate investor salary. For example, investors in states with higher property values, such as California or New York, can see much higher returns. Operating in an area like this can also see an increase in competition, with much higher investment costs, making it a high-risk, high-reward dynamic.
Alternatively, investors in more affordable markets aren’t as likely to experience huge paydays but can often make a good living off of multiple properties or more tangible commercial projects.
Aspects such as knowledge, expertise, and experience can’t be discounted either. Smarter investors who know how to divide their time, choose properties carefully, and analyze the state of the market are generally more likely to earn the big bucks.
At the top end of the real estate investing spectrum, you can find someone like Grant Cardone, one of the world’s most successful real estate investors. His portfolio is worth over a whopping $2.5 billion, showing just how much earning potential exists in the industry. Compared to the median average of $50,000 per year and the countless investors who don’t even make that much, it really goes to show just how much earning range there is in real estate.
Something that you should always keep in mind is that real estate investing isn’t a game where you can win overnight success. Making money in real estate takes time, patience, hard work, and a real understanding of the market.
When considering how to create wealth investing in real estate, you can employ a number of different strategies and tactics, either separately or as primary aspects of a business model.
Whether focused on rentals or reselling, property renovations are a great way to increase your ROI in real estate. Upgrading a property with a modernized kitchen or bathroom, increasing a home’s energy efficiency, and making aesthetic changes to enhance curb appeal are all ways to increase a property’s value. Still, this needs to be done carefully, as it does require further investment.
Like any business, real estate requires marketing. Knowing how to properly showcase your property and yourself as an investor is key. Crafting the perfect newsletter, using the right photography, and finding the proper channels for advertisement are all key methods that can be used to find the right tenants and homebuyers.
Choosing the right tenants is crucial. Remember, you’re not just selling a consumer good—you’re embarking on a unique financial partnership with this person for the duration of their rental period or mortgage. Make sure to choose someone with good references, provable financial stability, and a strong rental history. Otherwise, you could find yourself in negative situations that may even lead to the courthouse.
Leveraging financing, or in other words, borrowing money to begin an investment, is a common strategy for managing real estate portfolios. This essentially means you can purchase or mortgage more properties with less cash upfront, allowing you to use your returns to pay off debts. However, this approach is also a lot riskier, so it shouldn’t be abused.
Diversifying your investment strategies is another great way to increase your earning potential, opening up multiple streams of income that can support you against market fluctuations. Whether you’re branching out into the commercial sector, getting involved in real estate investment trusts, flipping houses, or even operating in alternative markets, it can help maintain consistent earnings.
Clearly, a set real estate investor salary is nonexistent. Countless plates spin in this industry, and being diligent with all of them at once is the only way to earn consistently.
Patience, industry know-how, and hard work will be the things that define your earning potential, and as is demonstrated by success stories such as Grant Cardone, that potential is massive. On your journey, make sure to apply the strategies we’ve described to give yourself the best chance of creating sustainable wealth moving forward.
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