Real estate investment is a great option, especially in the long term. Many real estate investors have lost money during the real estate bubbles. But if you choose your investment options carefully and have a long-term view, real estate offers one of the best returns on your investment. Following are the 4 ways you can make money through real estate investment.
- Price Appreciation
Appreciation of your real estate offers large gains, but it is not as straightforward as it seems. If the area of your real estate has some developmental work, the value of your real estate is more likely to increase. The demand of the real estate in your area is the main factor for price appreciation.
- Rent Income
While price appreciation is often unpredictable, rent income is quite predictable and regular. Rent income can be generated from residential as well as commercial real estate.
- Ancillary Real Estate Income
This is another kind of income quite similar to the rental income. Different companies pay the real estate owner for using their real estate for vending machines, mobile towers, and other facilities. Location is of utmost importance in this type of income. However, if your real estate is located in an area of interest, this can be a huge income source.
- Income Through Development
You can also create income through development. For example, you can buy an old house and invest some money and time on remodeling and improving the house. If done carefully and with proper planning, you can earn a high return on your real estate investment.
You can buy the real estate by paying cash or by the mortgage. Most investors with a short-term view buy real estate by paying cash. And you can buy real estate in your own name or in the name of a company. Buying real estate in the name of a company offers many advantages, especially in the case of an unexpected loss.