Good day to you all. Here is another opportunity to discuss real estate and investment portfolios. It is a general misconception that you will only make money renting out real estate, and few investors focus less on other ways of making money on properties. This misconception arises because many of us still think it involves owning a property and renting it out to make money. There are different ways to invest and make substantial profit in real estate properties, as we will discuss in this blog.
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Today, we will look at ways we can make money from property investment aside from the popularly known ways of collecting rents and property market appreciation. It’s good to understand that investing in property is essential to balance your investment portfolio. But you have to understand the various investment strategies and how to profit from these structures.
I will highlight four simple ways you can make money as a property investor today. This blog will elaborate on why it does not have to be rented or waiting for appreciation to earn an income from your properties.
The first step in investment property structure is ownership
The right of ownership of a property gives you leverage over that property, and there are different ways you can make money aside from renting the property. You can decide to restructure, make changes or decide to divide the properties and lease it out in a compartment. I know some people who had restructured their residential properties to warehouses because of the demand for warehouses in the region.
You can leverage your real estate property, take a loan with it or mortgage it. Property gives you lots of financial power you can leverage for wealth. Thus ownership of property is more than a bargaining chip, and it gives you financial control and the ability to leverage for funds or earnings.
Ownership gives you the power to do as you wish with the property and increase your earnings. Let me outline four strategies you can apply as a property owner to increase wealth:
- Property owners can increase the property’s value by renovating or converting the property. Renovating or converting the property will add value, thus increasing your earnings.
- Another way you can add value to your property is by converting the use of the property. You can change it for commercial or residential use, depending on which will bring more value at that period.
- You have the authority to change the rent period to determine cash flow. Depending on your strategy, increasing or decreasing the rent payment period may increase the property’s yield.
- You can also share your properties and rent portions out. This will also increase your earnings from the property.
Earn from REIT
The full meaning of REIT is Real Estate Investment Trust, which is different from Real Estate Management Company, and I will explain the difference to you.
Many people have not realised how REIT can afford those with less capital to invest in real estate property. This trust involves being part owner of properties and getting dividends based on your investment. It offers opportunities to those that do not have the funds to invest in estates and other real estate properties to start making returns from real estate investment.
With REIT, you get the opportunity to invest in a wide range of real estate properties from residential apartments, commercial properties, shop complexes, warehouses and other structures. You can invest what you can afford while expecting substantial returns. There are vast benefits of REITs such as enjoying tax deduction, retirement investment, owning global investment in locations like the United States, United Kingdom, and Europe.
Fractional investing in real estates
The third way you can make money in real estate properties is through fractional investing. Just like in REIT, you will own a fraction of the properties bought by a group of people. It usually consists of a group with a particular purpose, crowdsourcing for a real estate project. Here you have different investors that came together for a purpose, let’s say, building a medical facility.
As a part-owner, you will get a share of the income derived from that structure. This kind of investment is suitable for those that don’t have enough funds for real estate properties. Or those that seek to diversify their portfolio in different areas of real estate investment. You can own various real estate properties, from medical facilities to storage or residential facilities. Get them in other choice areas like the United States or the United Kingdom and increase your earning potential.
Use the owned properties
A property that does not yield returns is degenerating. The fourth strategy to earning real estate is to use the property and not just own it. With this strategy, you can find available real estate spaces and start renting them out. For example, during a major sport event, people in the host cities rent out their spare rooms or part of their home or space to make more money. It is a monumental waste to have a real estate property stay idle and not being used to make money. There are several abandoned properties that can be renovated and put to good use if the owners can source the capital for the renovation. Sourcing for capital should not be a problem as the bank or other financial institutions can easily grant loans which you can use for such renovations.
Now, I am sure you will be thinking of which of these strategies to adopt. The real estate properties business is one of the significant investment industries that has been around for ages. If you have not invested in this industry, you don’t have a versatile portfolio.
These are simple strategies, so don’t forget to share them with your family and friends. They will need this information to grow their portfolio.
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Recommended books for further reading:
- Rule #1: The Simple Strategy for Successful Investing
- Smarter Investing: Simpler Decisions for Better Results
- The Warren Buffett Way
- Intelligent Investor
- How To Be A Landlord: The Definitive Guide to Letting and Managing Your Rental Property
If you are looking to open an investment account, follow these links below:
- Passive income
- Silver & Gold coins
- Interactive Brokers
(‘68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.)