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How You Actually Make Money Investing in Real Estate

If asked, you would probably agree that real estate investing offers the opportunity to make a stable income. But do you know how it does that? Here are three ways you can actually earn income through the real estate market.

Appreciation

While it is certainly not guaranteed, home values have historically gone up over time. This appreciation depends on several factors, but, when you buy a home, you are hoping that it will increase in value so you can sell it for a higher amount.

Investors will look for properties that are below market value to make the largest profit. Abandoned or rundown properties, or ones that are approaching foreclosure, can often be bought inexpensively. After fixing them up, buyers “flip” the houses, selling at market value to another buyer. This is a way to make a quick, and potentially substantial, profit if you don’t mind the risks.

Rental IncomeĀ 

Buying a multifamily home, apartment building, or duplex offers another chance to earn income through real estate. You will need to be willing to take on the responsibilities of being a landlord and follow all applicable laws where you invest. Some people, like California native Steven Taylor, focus their investment strategy on purchasing and redeveloping apartments that are in need of a refresh.

Accessory Income

If you own or manage large properties with multiple tenants, you might also be able to add to your income with extra rentals or services. Things like storage units for an apartment complex, pay to use laundry units, and vending machines can all produce a regular stream of cash flow.

Brokers, managers, and agents can all make money as other people buy and sell properties. Taylor Equities is an example of a business that serves as a property manager, which is another great way to earn income in the real estate field.

A career in real estate is not for everyone. If you think it may be the right fit for you, take the time to consider which of these strategies most appeals to your personality and lifestyle before jumping in.

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