Why Real Estate Stayed Profitable Until Now?
Real estate has been the most essential asset for gaining wealth. Unlike any commodity, land is an ever-constant change to increase its value. As society grows, cities expand their territory as many businesses require space.
Another way of profiting from land is housing, as many people want to have their homes either closer to their work or a lovely house for vacation or retirement. As real estate is an ever-booming industry because land properties have a fixed supply and ever-increasing value, investing in this business is an excellent decision.
Why is Real Estate Profitable
Real estate makes up around 30% of the total wealth of American families, according to a 2020 survey of consumer finances by the Federal Reserve. The reason is that land appreciates over time and easily doubles its value in the proper cities.
As a fixed commodity, properties are highly marketable, and you can start investing for as low as five thousand dollars. Here is how you can start with some investment ideas.
Real Estate Appreciation
As we know, properties increase in value over time. Having a property when it is still affordable is crucial, then let time do its job. By holding on to the property for decades, it will appreciate selling it to more than double its purchase price.
Industry experts recommend that first-timers Invest in land for value appreciation because it has less involvement aside from visiting the property occasionally to avoid unwanted tenants. This investment is also excellent for individuals who have inherited a piece of land at prime locations because of its market value.
As they say, cash flow is better than static assets! In real estate, investing in rental properties is the best way to have a steady income by having a structure like a building or a house where a tenant will provide a constant cash flow as a form of passive income.
For example, a $200,000 property, if rented out for around $1,500 to $1,800 monthly, will result in an annual gross return of $18,000 to $21,600. Having an existing structure with less maintenance, you can expand by buying other properties around the area to be rented by families or leased by businesses.
Developing Raw Land
Land development is highly profitable as infrastructure tends to increase the value of a property. It is significantly faster than waiting for it to appreciate by developing the land by making infrastructure like water, sewage systems, roads, and other utilities with the necessary permits. Once barren or used in farming, the ground can be sold to residential or business developers or construct buildings to add another passive income.
There are more ways to profit in real estate. Hard work comes first, but the rewards are worth the effort. Proper management and study of the trends will provide you with a big commission or a steady cash flow.