The traditional approach to making money in real estate has been to buy a property, rent it out, and then, at some time in the future, sell it for a profit. This approach certainly is tried and true, and it works well enough for some people. But at the same time, it has kept many other people out of the real estate investing arena, either because it entailed working in areas of real estate that they weren't interested in, like property management, or because it was simply too boring.

There are investors who never learn to trade in the stock market because they don't want to be "tied to a computer screen all day." But this is simply a mistaken view of what it takes to buy and sell stocks successfully. In fact, stock traders don't have to sit in front of their computers all day long. And similarly, real estate investors don't have to deal with the day-to-day routines of things like property management if they don't want to.

The truth is that there are many different ways to make investments in real estate and harvest profits. The trick is to find out which area of real estate you are most interested in, and probably best at, and apply your skills, time, and talents there. Don't let anyone tell you what you should do, or what is best for you. You have to decide that for yourself. If you do, you will be happier, and you will make more money.

I. Buy, hold, and sell. 

Over the years, buying, holding, and ultimately selling has been the most common way that people made money in real estate. They bought a house, lived in it, and at some point sold it. Or going a big step further into the real estate investing game—they bought a rental property, fixed it up, managed it, and sold it. In recent decades, if you adopted this strategy, you were likely to make money. In fact, you probably wound up wishing you had pursued this strategy more aggressively and bought more real estate earlier in your life.

We hear this very often from retirees who have dabbled in real estate. "If only I had bought a little more real estate" they tell us. Almost without exception, we tell them that it's never too late! Even at a relatively advanced age, if you have the necessary funds to buy and maintain more property, a second home or a rental 
property in a good area is almost always worth looking into. Some of our relatives who are in their eighties are not only managing their existing real estate assets, but also building for their future, and for their family's future.

II. Buy, renovate, and hold/sell. 

For the slightly more aggressive investor, learning to buy and renovate property has traditionally offered two key advantages. First, it opens up a whole new category of potential purchases: properties that are undervalued because they need work and therefore scare off buyers who don't want to get in over their heads. 

Second, when you do the work yourself, you create "sweat equity," thereby adding a second element of profit—that is, in addition to the normal appreciation that your investment property would otherwise experience.

If you are handy, then using your talents in this way is one of the best ways to take control of your financial future.

Obviously, you can keep building sweat equity for as long as you own the property. Our parents and grandparents supplemented their income throughout their lifetimes with rental income. We can still remember family "outings" in which we all trooped over to the rental properties to do some work. Everyone was involved—including the little kids as soon as they could pull a rake or wield a paint roller. In fact, this was one of the ways in which our parents and grandparents taught us the importance of investing in the future— as well as the fun of doing things as a family.

There are two more things to consider when it comes to sweat equity. First, like everybody else, you're most likely good at some things and not so good at others. 

Sometimes it makes more sense to buy or barter for a certain skill than to try to master it yourself—especially if the skill in question involves specialized and expensive tools, or if mistakes in this area can be costly. And this leads to the second and related point: you need to keep an eye on how much your time is worth. 

If there's something else you could be doing that would earn you more money overall, you might be better off spending more time doing that and less time doing renovations. Of course, some people really enjoy redoing a fixer-upper. If that's the case, you have to figure the "fun factor" into your calculations, as well.

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