How to Make Money With Real Estate


How to Make Money With Real Estate




We've all heard this vague explanation of someone's apparent wealth, "Yeah, he made his money in real estate." This phrase is both intriguing and irritating. It is intriguing because the term "real estate" sounds like a magical gold mine where any one can just "make money." At the same time, it is irritating because people rarely ever elaborate on exactly how one does make money in real estate. Well, here are a few easy pointers to give you a basic idea of how someone "makes money in real estate."

Raw Land Income

Raw land is a great investment because land almost always appreciates. If you do not wish to improve the land in any way, you can still make money. Purchasing land, especially during a good time in the market, is one of the easiest ways to make money in real estate. You can essentially purchase land, leave it alone for a few years, resell it and make money. Other ways to make money off of raw land include allowing others to use the land by renting it from you. Land can be used for agricultural purposes this way.

Residential Property Income

The most common way to make money in real estate is with residential property income. Basically, individuals will purchase a property, usually one that is at a reduced rate, improve that property and then rent that property out to tenants. This is the most reliable way to make real estate income. Properties almost always appreciate, and your property will begin making you money as soon as your first tenant moves in. Things to consider with this option will be your responsibilities as the land lord.

A land lord's responsibilities will include certain maintenance on the property, insurance and taxes. You should also consider that a land lord will, to some degree, be responsible for the tenant's actions. If a tenant causes damage to the property, you can evict them, but you will still be responsible to repair the damage. Sometimes tenants can be difficult to get along with. You should definitely remember that creating income from rental properties is a job.

Commercial Property

A third option is commercial property income. Commercial property income is generated by purchasing properties which would be used for business purposes. These can include office spaces and other locations where business is conducted. Commercial property can in some ways be less stressful than residential as business owners will normally have higher standards of how they will take care of the property, whereas residential renters is more of a risk. You are basically at the mercy of that person's character. The stress of commercial property income will come in the form of maintenance, taxes, insurance and the specific laws in your city and state pertaining to commercial properties.

All of these options are viable ways to make money in real estate. However, like with any other job there is no such thing as something for nothing. All of these options will require hard work, research and dedication.






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