Investing in property is one of the best ways to earn income and capital gains. It’s not only one of the safest opportunities to invest your money but also it’s the best way to increase your wealth. When we talk about investing in property we must talk about property funds. There are two types of property funds – direct and indirect.
Direct property fund involves buying commercial real estate such as office blocks and renting them out to earn rental income. The investor can also benefit from capital appreciation as well. Indirect property fund is all about investing in shares of the companies that operate in the property market. For more information about these two types of property funds, you can reach out to Stamford Capital Investment brokers.
You can leverage property funds to earn capital gains. And that’s what this article is about. So let’s see some of the best ways to earn profits from property investments.
1- Buying at a Low Price
There’s nothing better than buying a property at a price that’s under the market value. Think about buying a property in quick sales, foreclosures, and try employing your best negotiation skills while you’re at it.
2- Rental Income
One of the best ways to earn income from your property investment is to rent the property out. This is one of the main reasons why people are into property investments – to earn rental income. And if you’re able to rent your property to a business, then you can enjoy earning higher rents.
3- Selling at a Higher Price
In order to earn a capital gain from property investment, you must sell the property at a higher price, i.e. above its market value. There are ways in which you can stage your property in order to attract buyers and sell them at a higher price.
4- Leverage Can Increase Profits
Try employing leverage in real estate transactions. Even if you mortgage a property in order to earn rental income and you put 15 percent down on your property, you will receive rental income on the basis of 100 percent of your property’s value. If your property is worth $100,000 and you charge $800 for rent, which includes $500 for taxes, fees, and mortgage, then you can still earn $300 profit every month. That’s $3,600 a year. It’s a good return on your $15,000 down.
5- Rent Smaller Units
If you have managed to buy a commercial property or an office block, then it’s wiser to rent smaller units to different businesses. This way you can earn more rent than you can earn if one business rents the whole place. Same is the case with residential property. You have the option of dividing a residential property into a duplex and charging more rent for it.
With indirect property funds, property investors do not have to go through such complications. All they have to do is just sell their shares in the funds if they want to earn capital gains.
August 1, 2018