How to Make Money in Real Estate

Whether you’re curious about the investment potential of?real estate?or you’re simply sick of infomercials promising little-known ways to “profit from your property,” it’s worth learning, for real, how real estate creates wealth. Rather than providing obscure strategies for?investing in real estate?or a primer on?homeownership for first-time buyers, this article will focus on how to make money through real estate. It will cover both the basic methods that haven’t changed in centuries, no matter what kind of gloss the gurus of the moment try to put on them, and specific opportunities that have arisen relatively recently. rticle is aimed at helping you to know how to compound riches into abundant generational wealth using real estate investment as the primary tools as done by MICHAEL OTEDOLA , Aliko Dangote , Dr. Sijibomi Ogundele LLB ,etc to mention but few.

1. Real Estate Profits from Increasing Property Value

The most common way that real estate offers a profit:

a. It?appreciates—that is, it increases in value. This is achieved in different ways for different types of property, but it is only realized in one way: through selling. However, you can increase your?return on investment?on a property in several ways. One way—if you borrowed money to buy the property—is to?refinance?the loan at lower?interest. This will lower your?cost basis?for the property, thus increasing the amount that you clear from it.

b. The most obvious source of appreciation for undeveloped land is, of course, developing it. As cities expand, land outside the limits becomes increasingly valuable because of the potential for it to be purchased by developers. Once developers build houses or commercial buildings, it raises that value even further.

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c. Appreciation in land can also come from discoveries of valuable minerals or other commodities—provided that the buyer holds the rights to them. An extreme example of this would be striking oil a good examples of the oil striking is found in the oil rich blessed areas of the Niger Delta, but appreciation can also come from gravel deposits, trees, and other natural resources.

Another very important appreciative factors for residential properties is location?which is often the most important appreciative factors. As the neighborhood around a home evolves, adding transit routes, schools, shopping centers, playgrounds, and more, these changes cause the home’s value to climb. Of course, this trend can also work in reverse, with home values falling as a neighborhood decays which occurs as a lack of maintenance to the infrastructural amenities, over crowding in the said locations etc.

House(Home) improvements can also spur appreciation. Putting in an extra bathroom, introducing the gym and spa Centre, swimming pool, car garage and remodeling a kitchen with state-of-the-art appliances are just some of the ways that a property owner may try to increase the value of a house(home).

Commercial property?gains value for the same reasons as raw land and residential real estate: location, development, and improvements. The?best commercial properties?are perpetually in demand. click this link: https://wa.me/message/AVY4ZCWYATLLB1 to know more about the latest commercial estate in the ever growing high brow areas of Lagos.

2. Real Estate Profits from Income

Another way that real estate generates wealth is by providing regular payments of?income. Generally referred to as rent but this income from real estate can come in many forms like the following

a. Raw Land Income

Depending on your rights to the land, companies may pay you?royalties?for any discoveries on the land even after purchase or regular payments for any structures they add based on the agreement signed by the Assignee and Assignor. For example, these include pump jacks, pipelines where oil strike is discovered, gravel pits for quarry, access roads and cell towers for telecommunication service provision access. Raw land also can be rented for production, usually agricultural production, and land tracts with trees may be valuable for the timber that can be periodically harvested etc.

b. Residential Property Income

The vast majority of residential property income comes in the form of basic rent. Your tenants pay a fixed amount per month—which will go up with inflation and demand—and you take out your costs from it, claiming the remaining portion as rental income. A desirable location is critically important to ensure that you can secure tenants easily.

c. Commercial Property Income

Commercial properties can produce income from the aforementioned sources, with basic rent again being the most common, but can also add one more in the form of?option?income. Many commercial tenants will pay?fees?for contractual options like the?right of first refusal?on the office next door. Tenants pay a?premium?to hold these options, whether they exercise them or not. Options income sometimes exists for raw land and even residential property, but they are not common.

Residential/Commercial Real Estate: Paths to Profits

This is a closer look at some of the many ways that you can earn income from residential properties.

a. Buy and Hold

This is one of the more traditional ways of earning income from real estate. There are a number of ways to accomplish this: You can buy a single-family home and rent it out; buy a multifamily home and live in one of the units while renting the others—ideally to cover the?mortgage?and your own housing expenses; or purchase a multifamily home and rent all of the units—either?managing the property yourself?or hiring a?management company?to handle renting units, collecting rent, addressing needed repairs, and so on.

Flipping

Property?flipping is a?specialized way of adding high-return fixes to both residential and commercial properties in a short time and then selling them.?Flipping?can be lucrative if you know how to find properties to fix up, you have the necessary skills to do the renovations yourself or oversee a crew to carry them out, and you have a sense of a property’s underlying costs and potential value. however in the absence of such knowledge you can Hanifar Dynamic Company Limited is the specialized representatives you need for that expert touch contact them via [email protected]

Shortlets and Vacation Rentals

The demand for home-away-from-home rentals had taken off in recent years, as many travelers preferred this option to staying in a hotel. Homeowners could earn income by renting out a house or even just a room on a short-term basis, especially if the property is in area that’s a well-known tourist destination. But it should be kept in mind that short-term rentals are regulated and sometimes even banned in certain cities. Check the rules and regulations of the property location before listing a property on a website such as hotels.ng, Nigeria property Centre(NPC),Shortlets.com etc. Also, figure in what additional deep cleaning and sanitizing between guests will add to the costs.

3. Alternative Real Estate Income Sources

this explanation is based on the proven practiced of the real estate expertise

Real estate investment trusts (REITs),?mortgage-backed securities (MBSs), mortgage investment corporations (MICs), and?real estate investment groups (REIGs)?are investment alternatives within the real estate sector. They are generally considered vehicles for deriving real estate income, but they have varying processes for doing so and varying processes for entry.

REITs

With an REIT, the owner of multiple commercial properties sells shares (often publicly traded) to investors (usually to fund the purchase of more properties) and passes on the rental income in the form of a distribution. The REIT is the?landlord?for the tenants (who pay rent), but the owners of the REIT record income once the expenses of operating the buildings and the REIT are taken out.

MBSs, MICs, and REIGs

These are even a further step removed, as they invest in private mortgages rather than the underlying properties. MICs are different from MBSs in that they hold entire mortgages and pass on the interest from payments to investors, rather than securitizing portions of?principal?and/or interest. Still, both are not so much real estate investments as they are?debt?investments. REIGs are usually private investments with their own unique structuring, offering investors equity investments or partnership servicing. For more details on this contact Hanifar Dynamic Company Limited on [email protected]

?Several credible real estate profit and income alternatives are available for making money in the real estate sector, but they come with varying caveats and entry points. click this link: https://wa.me/message/AVY4ZCWYATLLB1for more alternative routes of profits and income in Nigeria real estate that doesn't necessarily need you been involved directly.