The many ways of making money with real estate include not only
the various types of property. Of course you can make money with
land, apartment buildings, homes, commercial buildings and more.
But with whatever type of real estate, there are different ways
you'll make your profits. Some of those ways, and how to
maximize them, are listed below.
1. Pay-down on the loan. Equity builds with every payment you
make. If you get the lowest interest rate you can, more of each
payment will go towards the principal.
2. Cash flow. Buy income property the right way, and you not
only have your tenants paying all the costs and paying down the
mortgage loan, but you also have positive cash flow. As a rule,
just don't buy properties without cash flow.
3. Value appreciation. Sometimes making money with real estate
can be as simple as holding on and waiting. For the most
appreciation in value, however, you should buy in an area where
demand is growing faster than the supply.
4. Tax depreciation. After all the tax law changes, you still
get to declare a loss for depreciation that doesn't really
exist. Saving at tax time, means more after-tax profit. To
maximize this, buy property that has its value primarily in the
buildings, because you can't depreciate the value of land.
5. Get instant equity by buying low. Buy below market and you
get instant equity that will be converted into a profit when you
sell. Offer a reason for the seller to sell low: fast closing,
cash, assume some debts or liabilities, etc. Alternately, just
make a low offer. A seller may have his own reasons to sell it
cheap. 6. Selling high. If you clean it up nice, make it easy to
buy, and find the right buyer, you'll get top dollar. The
following four on the list cover ways to create value, so you'll
get more when you sell.
7. Finance the sale. You'll often get substantially more for a
property if you offer financing. This is especially true if you
let someone buy it with little money down. You can also get good
interest on the loan.
8. Changing the use. Find a higher use for the property, and
you can convert it to make it worth more to the next owner. This
could mean making condos into apartments, or apartments into
condos. Perhaps converting a home into office space will get the
biggest return.
9. Improve and repair. Repairing anything that needs it is
obvious, but you need to look creatively and carefully to find
improvements to make. Concentrate only on those that will raise
the value several times more than what they cost you.
10. Sell it in parts. Sometimes in real estate, the parts are
worth more than the whole. For example, splitting off an extra
lot to sell for $30,000 will rarely decrease the value of a home
by that much, so you'll make more money in the end.
Look at the sources of profit listed here, and think of how you
can use a few of them on your next real estate investment. You
can get wonderfully creative making money with real estate.
About the author:
Steve Gillman has invested in real estate for years. To learn
more, get a free real estate investing course, and see a photo
of a beautiful house he and his wife bought for $17,500, visit
http://www.HousesU
nderFiftyThousand.com
