Property investment is one of the most secure forms of investing as your asset is tangible. Unlike stocks, which fluctuate with the market and generally don’t have a physical value or representation, real estate means that you own a physical item. So, no matter how much the value changes, you’ll still hold the same amount of bricks, beams, and land.
It doesn’t mean, however, that you’re guaranteed to turn a profit. It is still possible to make bad investments in property, so it’s essential to have a strategy when purchasing real estate. With that in mind, we’ve put together this list of ways to make money through property investing.
The first, and arguably one of the most stable forms of real estate investment, is commercial property. For example, all Melbourne CBD offices for lease have owners, and if you’re one of them, you’ll acquire income through the rental fees paid by businesses that need these types of spaces.
An extra benefit of owning a commercial space is that it generally offers higher yields than its domestic counterparts due to longer leases and typically lower overheads, so you’ll be able to get to a cash-flow-positive space sooner.
If the domestic market is more your scene, short-term rental arrangements can provide great returns. By providing short-term accommodation, you can tap into a market demographic that is often overlooked by standard rental agreements as many landlords don’t want tenants who are going to move out in a few months. That makes it an ideal solution for homes in holiday destinations as you can block the dates when you want to use your vacation home and make money the rest of the time.
If you’re looking to build wealth using the home you live in, you may wish to explore options for sharing your space. Unoccupied rooms are untapped money-makers, and if you have a granny flat, bungalow, or similar building in addition to your principal dwelling, it barely feels like you have housemates.
Those with rural property can also consider offering livestock agistment. This setup could net you a nice profit with minimal work on your part. It also provides fringe benefits such as not having to worry about the grass growing too high. If you have your own animals, they may also enjoy having some new friends, and because you’ll most likely have lower maintenance requirements for your paddocks, you’ll be able to spend that time elsewhere.
Capital Gains and Appreciation in Value
Finally, one of the main reasons for holding residential real estate is capital gains. Property, on average, almost always appreciates, and while that value isn’t always instantly accessible, it can be highly beneficial to your back pocket. Not only can you use that appreciation in equity to fund other purchases, but you’ll also make a tidy profit upon the sale of your real estate.
These five money-making methods aren’t the only ways to turn a profit with real estate, but they are methods that aren’t as commonly thought about in comparison to residential rentals. That means that you’ll find your gap in the market more easily and have access to higher earning potential. So these property investment strategies are certainly worth considering.
Having said that, this information is all general in nature and should not be considered financial advice. We suggest speaking with a professional to establish what’s best for you, as only you know your specific circumstances and financial situation.