There are two basic ways to make money in real estate. One is to buy a property, wait until it has appreciated in value, and then sell it at a profit.
The other is to buy a property and rent it out, thereby using it as a source of consistent income.
However, most people don’t have the capital to buy a commercial or residential property. The underlying assumption is that to enter the real estate market, you need to have a substantial amount of capital of your own. But this doesn’t have to be true. Here’s how you can make money in real estate in 2020:
Make investments with a real estate fund
A mutual fund, or real estate fund, helps you pool your money with a host of other investors to directly invest it in real estate properties. You won’t be actively involved, but the fund will invest in stocks and bonds, and you’ll make a profit over a period of time.
There are three kinds of real estate funds:
- Equity funds, which make investments in properties.
- Mortgage funds, which make investments in mortgages.
- Hybrid funds, which make investments in a combination of properties and mortgages.
Buy a commercial property you can rent out
While it does require a lot of cash upfront, renting a property out is an effective way to ensure a consistent income. Commercial properties have higher rents than residential properties.
If you’re thinking of buying a commercial property to rent out, you’ll need to ensure that the property tax, monthly mortgage, and commercial insurance payments combine to less than the rental value. You can do this by buying a property in a locality that has high rental values. Our commercial real estate experts in Sterling Heights can guide you, so you can get a property you’re sure to make money from.
Make money off advertising spaces and additional services
If you’ve rented all the office spaces in a commercial property, you have the right to use the outer structure of the building for advertising. You can do this by means of billboards or posters. The bigger the billboard, the more you can charge. Most commercial properties also have adjoining parking lots and garbage disposal systems, for which you can charge extra.
We, at Macomb Commercial Real Estate, care about your commercial investments. If you want to buy or sell industrial or commercial property in Warren, Utica, or Sterling Heights, contact us today. We’ll make sure you get the best deal possible.