“Buy land. They’re not making it anymore,” humorist Mark Twain said. Buying, selling, or leasing real estate is a great way to make money, and there are people who have made millions. This type of purchase is called an investment property – land/property that you use to make money in some way.
There are several ways to turn a profit on real estate if you know the basics. Read on for more information on investment property options.
Purchasing a property in order to rent it out to others makes it a rental property. Whether it’s a home or an office, receiving rent could be a solid source of income for years. Knowledgeable investors know that there are plenty of factors in choosing a profitable rental property.
As the property owner, you would be considered the landlord and legally responsible for paying the taxes, maintenance costs, and mortgage. So it’s important to keep all those factors in mind when calculating rent. For example, if the property’s mortgage is $650/month, the landlord could charge $1,100/month and turn a nice profit.
One solid strategy with rental properties is to charge the tenants just enough to cover the mortgage and expenses until the home is paid off. After that, monthly rent would only need to cover yearly property taxes and maintenance costs. The rest would be a nice passive income.
Do you have an inner “HGTV Guru”? Then house-flipping might be the investment for you. This strategy means buying a house (hopefully for a bargain) and then selling it off again for more money. The trick is to find a home that may only need cosmetic repairs, which can be done rather inexpensively. Then once the repairs are made, you can sell it for more. As with any investment, flipping homes can be risky and a bit time-consuming, but also abundantly rewarding.
A REIT (Real Estate Investment Trust) is a hassle-free way of real estate investing. Instead of owning a home yourself, you put money into a trust for a larger corporation to manage. A company will buy and sell property as they see fit, using money from a group of investors like yourself. Then the proceeds from these transactions go to you.
If you are looking to purchase an investment property, call us today to talk about your needs.