When one invests in real estate, the goal is to mature one’s money in order to have extra in the future. One has to be strategic in their thinking by making sure they generate enough profit to be able to cover everything from the costs it takes to own the real estate investment as well as the taxes to be paid on it.
Let’s have a look at the game of Monopoly as a basic real investing simulator. To win, you have to be very money savvy. Gauging and being very analytical in considering what real estate to buy in monopoly land in addition to leaving enough cash on hand could make you a winner. On the flip-side, you could lose if you buy every real estate venture you seem fit without thinking and saving enough money to pay for other financial obligations. That leaves you out of cash and no cash means you have to start selling off the assets you acquired with a major price cut from the original price you bought them.
Take this principle and apply it to real world. Real estate investing is a real life monopoly. Buy properties, avoid bankruptcy, and generate rent so that you can buy even more properties. Simple? Maybe but remember “simple” doesn’t always mean “easy”. If a mistake is made along the way, you could end up in a huge financial loss. So how do you make sure you get your monies worth when real estate investing? Check out 4 types of real estate investing that can help you become a real estate investor guru.
1. Cash Flow Income: This type of real estate investment focuses on buying a real estate property, such as an apartment building or house, and operating it so you collect a stream of cash from rent, which is the money a tenant, pays you to use your property for a specific amount of time. Cash flow income can be generated from apartment buildings, rental houses, office buildings, well-run storage units, car washes and more.
2. Real Estate Appreciation: This is when the property becomes more valuable due to a change in the real estate market. This type of change could either be that the land around your property is becoming busier with an inclusion of a development such as a major shopping center close by, or certain upgrades you may put into your property to make it more attractive to potential buyers or renters. Real estate appreciation can be tricky and is riskier than investing for cash flow income.
3. Real Estate Related Income: This is income generated by “specialists” in the real estate industry such as real estate brokers, who make money through commissions from buying and selling property, or real estate management companies who get to keep a percentage of rents in exchange for managing and maintaining a property.
4. Ancillary Real Estate Investment Income: For some real estate investments, this can be a huge source of profit. Ancillary real estate investment income includes things like laundry facilities in low-rent apartments or vending machines in office buildings. In effect, they serve as mini-businesses within a bigger real estate investment, allowing you to make money from a wide collection of customers.
Contact Emerald Properties
+233 302 78 1857, +233 245 709 285, +233 202 222 331