You can make money with real estate in a variety of ways. For example, you can make money with land, apartment buildings, homes, and commercial buildings. All of these options also come with different ways to make profits. Making money with real estate is not difficult if you have access to the following information.
- Every payment makes a difference. With that in mind, it is important to pay down on your loan as quickly as possible – this results in the building of equity. The lower the interest rate, the more of your payment will go toward the principle.
- Keep a positive cash flow. Ideally, you will not only have your tenants paying all the costs and paying down the mortgage loan, but you will also have positive cash flow.
- Property value appreciation. Sometimes making money with real estate is as simple as making the purchase and waiting for the property to appreciate in value.
- Tax depreciation. When it comes to taxes, owning property is a very good thing. You get to declare a loss for depreciation that doesn’t really exist. Saving at tax time, means more after-tax profit, and to maximize this you should buy property that has its value primarily in the buildings, because you can’t depreciate the value of land.
- Buying low equals instant equity. When you can buy below market you get instant equity that will be converted into pure profits when you sell. Always make low offers, but provide reasons.
- Selling high. Spruce things up, make buying easy, seek the right buyer, and you will get top dollar.
- Offer financing. You will usually get substantially more for a property if you offer financing. If you let someone buy the property with little money down and get good interest on the loan, you can expect better profits.
- Make the property worth more. Find a better use for the property. Converting apartments into condos or changing residential property to commercial may result in bigger returns.
- Repair and renovate. Focus on making repairs that will raise the value much more than the repairs will cost.
- Consider selling it in parts. The parts might be worth more than the whole. For example, if you have a home on several acres you may want to sell off some of the property separate from the home.
Investing in and making money with real estate can be lots of fun – it can be a very exciting and lucrative career. Use the sources of profits listed here to enjoy more profits on your next real estate investment. Getting creative in making money with real estate makes the career even more fun!