Zillow's Chief Economist says short-term money-making tactics like house flippin...

In the current U.S. housing market, your chances of finding the ‘get-rich-quick’ card as a real estate investor are slim, according to Zillow Chief Economist Skylar Olsen.

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Olsen told Business Insider she believes the party’s over for short-term real estate investors who rely on tactics like house-flipping (when you buy a property, fix it up and then sell it for a profit) to make a quick buck.

She blamed her bearish outlook on mortgage rates — which she expects to hover around 5.5% to 6% in the “long run” — and the fact that elevated house prices have kept homebuyers out of the market.

If you’re a real estate investor looking to keep some skin in the game, here’s three ways you can generate positive cash flow.

Buy, hold and build equity

The simple fact is that people can’t afford to buy houses. As mortgage rates hover above 6% and house prices remain high, affordability and demand have suppressed.

Olsen thinks real estate investors should adopt a buy-and-hold strategy to ride out the tumultuous market — and build cash flow along the way.

By holding onto your home and putting more money toward paying off your mortgage, you can build home equity — the difference between how much your home is worth and how much you owe on your mortgage.

This is an attractive prospect for the roughly 40% of current U.S. mortgage holders who secured low fixed-mortgage rates of 3% to 4% in 2020 and 2021, when the COVID-19 pandemic drove borrowing costs to historic lows.

Desperate to hold onto their low mortgage rates, they’re choosing not to sell their properties, instead building their home equity. This comes with benefits.