“Real estate investing even on a very small scale, remains a tried and true means of building an individual’s cash flow and wealth.” -Robert Kiryosaki
It has been said that owning a home is the keystone of wealth–both financial affluence and emotional security–at least according to Suze Orman. However, financial analysts and investors alike would collectively advocate real estate investment–a tried and tested way to earn profit. So, what is it about real estate investments? And how do condos such as the ones in ayala land premier condominium cebu or elsewhere make money? Well, here are some of the ways you can make a sound investment out of real estate:
1.) Rental Income
Turning one of your real estate investments into a profitable venture is as easy as renting it out to tenants. It provides a steady cash flow monthly and does not need any overt action from you apart from supervising the move and providing your tenants a set of rules to abide by while they are in the house.
2.) Buying low and selling high
Another way to profit from real estate is purchase a property that is under market value. You can find a lot of these from quick sales and foreclosures, all you need to do is to work on your negotiation skills. Making the extra money comes by staging the bought property, attract buyers and sell the properties at a higher price than the one you bought it for.
3.) Leverage increases returns
Regardless of what you put down in a property, you will still receive rental income based on the hundred percent of the property value which makes it a great return of whatever you put down. This however, widely depends on how much you charge for rent and mortgage.
4.) Rent smaller units
Instead of renting out the entire house, it would make more sense and would be financially advantageous if you rented out smaller rooms to different tenants. Instead of renting out an entire unit, you can offer bed-spacer options instead. You would make more profit this way than by having one family rent the entire place.
5.) Increasing equity
Suppose you use mortgages to finance a rental, you are effectively increasing equity with every mortgage payment. This is mainly done with the mortgage repayments that offer big equities. An example of this is putting down 25 percent on a rental with mortgage equities that are at 33 percent at the moment. Eight percent of those are paid by rents and would increase your net worth every month.
6.) Renting to businesses
In a sense, renting to businesses would offer you more in terms of money. This is because businesses are a different type of tenure which means that rents would usually cost a lot more. Additionally, you can almost always guarantee than your the business owner would not run out on you when it is time to collect rental payments as it is much safer to rent to businesses–especially one that is well-known and respectable.