The main purpose of entering into any investment is to make money, whereas one would have dropped their money in the bank. One must understand that as much as investing comes with lots of benefits, it also has its own risk. However, that will not necessarily be our concern in this article, as we will be focusing on how to make profits in real estate.
Investing in real estate is one of the oldest investment options anyone can find. A lot of people had made fortunes from real estate by simply buying a landed property and waiting for it to appreciate. The good thing about investing in real estate is that it’s an investment option that can always remain relevant. As long as people buy a house, or rent out a space, there will always be the need for real estate investment. Therefore, we advise you to sit tight and pay rapt attention as we show you 5 ways you can make profits with real estate investment.
Buy and Hold
This is one of the most common ways of making money from investing in real estate. This involves investors buying an underdeveloped property, holding it while it appreciates, then selling it at a profit. This way of making a profit is viable because landed properties and buildings mostly appreciate over time. However, it can take quite a while before investors realise their profits. This is why it is important to carry out diligent research before buying any landed property. Find out the potential of the community where the landed property is located, and the chances of it attracting developers.
Profits from leasing
Investors can also make profits weekly, monthly, or annually by renting out part or the whole of their properties. An investor can construct a residential building and then rent it out to interested people, who will pay a monthly rent to investors. One can also lease their land to be used for farming or carrying out business activities.
Real Estate Investment Trust
The pattern of operating a public Real Estate Investment Trust can be compared to investing in the stock. Investors can get dividends from the company in question and can also decide to sell their shares at a profit after the market has undergone appreciation. However, building a successful REIT is not an easy task, as it requires good management skills.
Fix and Flip
Flipping is another lucrative way of making profits from real estate investment if you are good at finding underdeveloped properties to fix up and ready to carry out the necessary renovations on the property. After repairing and renovating a rundown residential property, investors can now sell at a profit.
Real Estate Crowdfunding
This is method of making profits from real estate investment is quite new. Here, a professional investor or developer discovers a commercial property to invest in which requires a lot of capital to commence. The developer then offers an opportunity to the public to invest in the project for a percentage profit that will last for a certain period. However, before investing in any commercial project, investors should be guaranteed the credibility of the developer.
Like every other investment, making profits from it is not guaranteed due to the risk associated with it. However, one can minimize their loss by getting the required information before making any investment decision.