The following piece aims to provide the best ways on how to make money in real estate investment. From rental income to buying low and selling high, all the nine options are discussed in a reader friendly manner.
Property investment is undoubtedly one of the best methods to make money passively and build up massive wealth. Real estate was one of the top-performing asset classes in 2015, giving returns of 13 to 14% for the year, which was incredibly superior to that of other asset classes. For 2016 and the coming years, experts believe that the risk-return profile of real estate will be less obvious. As a result, there will be significant advantages to be achieved through real estate investment.
Thankfully, in the UK, there are a lot of places where you can network with other property investors to help you get started. There are the Property Investors Network or PIN Meetings that are held regularly. More importantly, these meetings even guest highly successful investors who share proven tricks of the trade like Lisa Oliver, Rick Otton, and the like.
So really, getting started shouldn’t be as daunting as most people think it is due to the information resources available to anyone.
If you are interested in investing in property, here are some popular ways on hot to make money in real estate:
The vast majority of real estate investors earn money through residential property income in form of basic rent. Tenants pay a fixed amount of rent on a monthly basis, which goes up with inflation and demand.
You can get an instant profit if you achieve to purchase a property for under the current market value. Think of quick sales, foreclosures, and exceptional negotiation skills.
Commercial Real Estate Income
Commercial properties can enable you earn massive income through various ways with basic rent being the most common. You can also earn more income in the form of option income. A vast majority of commercial tenants pay fees for contractual options such as the right of the first refusal. Options income is also occasionally used for residential property and law land but they are very uncommon.
You can earn an attractive profit if you stage your property to attract buyers who are willing to pay more than the market value.
You can take a mortgage to finance a residential property and end up increasing your equity after each and every mortgage payment.
Wholesaling properties is when an investor purchases a property or gets a property under contract. He immediately sell the property to another buyer without repairing anything and in some cases without purchasing the property. A real estate investor can wholesale a property without purchasing it, by acquiring the under contract and assigning it to another buyer.
You can buy a property in a great tourist location, make use of an excellent property manager to rent it out on your behalf and collect the rent. The most challenging part of a vacation rental is that it features an extremely cyclical market. You can earn top dollar during the peak season and earn almost nothing during the low season. But this investment option is also worth trying especially if you get a popular tourist attraction location.
REITS and MICs
REITs (real estate investment trusts) and MIC (Mortgage Investment Corporations) are basically considered to be great options of earning income from property investment. With REIT, the owner of several commercial properties sells shares to investors to fund the purchase of more commercial properties. They then passes on the property rental income in form of distribution.
MICs usually invest in private mortgages instead of the underlying properties. They are not so much property investments as they’re debt investments.
Raw land income
Companies may pay you regular payments depending on your rights to land ownership for any structures they add or royalties for any discoveries. Such structures include cell towers, access roads, gravel pits, pipelines, and pump jacks. Raw land can also be leased for production such as agricultural production.
Here’s bottom line; there are countless ways to earn income investing in real estate. Long-term rentals are the most preferred as they continue to bring cash flow month after month throughout the year. Buying low, selling high, REITS, wholesaling properties, and increasing equity can also make you wealthier if you conduct your research well, take your time and purchase right.