How You Make Money In Real Estate
Category News
No matter what anyone tells you, the basic ways that money is made through real estate haven’t changed in centuries.
Appreciation is the most common. It’s achieved through different means, but the increase in a property’s value isn’t realized until the owner sells or refinances the land. Raw and undeveloped land, like the territory right outside a city’s borders, offers the biggest potential for development and profit. Appreciation can also come from discovering valuable materials on a plot of land, like striking oil.
Location is the biggest factor in the appreciation of residential property. As a neighborhood grows, property values climb. Home improvements, such as remodeling a kitchen, can increase property values, as well. Location, development and improvements also help commercial property to appreciate.
Income from real estate comes in many forms. The biggest generator is the rent paid on residential properties and commercial properties. Companies will pay royalties for discoveries on raw land, or they may pay to build structures on it, like cell towers or pipelines.
Income can also come from real estate investment trusts, or REITS, in which real estate is the underlying security. In a REIT, the owner of multiple properties sells shares to investors, and passes along rental income in the form of distributions.
source:Investopedia.com
Author: Apex Properties