Real Estate Investing Info
When you sink your money into real estate, your end goal is typically to make your money work for you by growing and returning to you. Profit, or more money in the future, is the ultimate goal. For any investor, it’s important to not just make the money back you invest but to make enough profit to cover the risk, the taxes and the cost associated with owning a piece of property including utilities, maintenance and insurance.
While the simply concept of buying property, avoiding bankruptcy and generating rent or income might sound like you’re playing a board game, it’s never easy and investment should never be taken lightly. It requires a systematic strategy and understanding of how you’re going to make your investment back.
How Real Estate Investment Pays Off
When you invest your money in real estate, be it commercial or residential, you can potentially get your money back through one of four ways:
Appreciation of Real Estate Investment
Real estate appreciation occurs when the property you purchase becomes more valuable because of changes in the surrounding real estate market. It can also be attributed to available property being scarce, proximity to major shopping, upgrades you made to the property, etc. It’s difficult to influence appreciation in property in hopes of selling real estate – more so than investing for rental cash flow as a secondary income.
Cash Flow from Real Estate Investment
Cash flow is typically a long term investment in property or real estate. It involved purchasing single or multifamily property and managing that property to collect a monthly or weekly cash stream paid by tenants who use your property, live in the homes, etc. Cash flow can come from more than just homes or apartments. It can be generated from storage facilities, car washes, commercial office space, vacant property for events, parking structures and more.
Related Income from Real Estate
Related income is income generated by specialists in the real estate industry. These are often brokers who make commissions on buying and selling property. It also includes real estate management companies who keep a percentage of rent in exchange for handling the routine maintenance and day to day operations of the property.
Ancillary Income from Real Estate Investment
Ancillary income is a popular secondary source of income for investors in real estate. This includes anything that generates additional income within property you own and can include vending machines, toll booths, laundry facilities, and other “mini-businesses” within your real estate investment.
It’s important to remember that no investment is safer than another. Whether you’re investing in real estate, stocks or some other security you should take the time to research the most appropriate investment for your positions, your goals and investment budget.
This information is for educational purposes only and in no way guarantees your profitability by trading the equities mentioned. See Terms and Conditions.