October 14, 2022
The real estate market continues to remain an excellent investment option, especially for young investors. Promising great returns and tax benefits, an investment in real estate can help secure your future financially. Imagine buying a property today and earning monthly rentals for years down the line.
While these age-old benefits of real estate investments stand true even today, there are other interesting ways to maximize profits from your real estate assets. REITs and REIGs, property flipping, crowdfunding and so on add to the benefits of investing in real estate. Here are a few ways to profit from your real estate investments.
Any asset when revamped undergoes an appreciation of value. The same logic applies to real estate. If you are somebody who enjoys renovating spaces and possesses the capital to do so, then flipping a house could be the deal for you. There are two types of real estate flippers – the ones who buy an undervalued property and add value to it by renovating it over time, and the ones who invest in a property with a good intrinsic value (not needing major renovation).
The first type of flipping calls for a long-term investment where the buyer invests a lot of time and money in remodeling the property to enhance its value. The second is a quicker process where the investor does not spend much time revamping the property and sells it off within six months of purchase.
One of the traditional ways of profiting from real estate, renting out property is a rather safe option. Whether you own a residential or commercial property, the rent from tenants remains a fixed monthly income which increases with demand or inflation.
Keeping the maintenance costs aside, a larger segment of the rent obtained from such properties becomes the owner’s profit. So choose the location wisely while investing in real estate because demand for rental properties largely depends on it. A convenient and central location always attracts more tenants and better prices for rental homes in Goa.
A real estate investment trust (REIT) is the ideal option for those looking for intangible property assets. REITs are created by trusts or corporations that rely on investors’ (like you) money to buy and run their non-residential real estates projects like offices and malls. There are two primary highlights of investing in REITs.
One, they can be transacted on major stock exchanges, which makes them easily accessible without any middlemen. Two, REITs are liable to pay out 90% of their taxable profits in the form of dividends to all investors, which means that you can expect a regular income from your REIT investment.
In the simplest terms, investing in REIGs is like renting out a property without having to worry about maintaining it or even looking for tenants. Real estate investment groups (REIGs) are companies that purchase apartments or properties and let investors like you purchase these apartments through them.
The group takes care of everything from advertising vacancies to maintenance and interviewing tenants, and charges a portion of the monthly rent in return. Because this process involves several investors, a percentage of the cumulative investment is set aside to meet occasional vacancies. This ensures that you will receive at least some income even when your purchased apartment is vacant for some time. REIGs is a convenient option for owning rental real estate minus the hassle of actually taking charge of the background work.
Raw land income refers to the earnings made from letting companies construct structures on your land. If you have idle land then you might as well make an income from it, without investing anything in construction. Simply lease out all or a portion of your land to companies who may need land for cell towers, gravel pits, pipelines, or access roads and earn a monthly/yearly passive income from it. You can also rent out your land for agricultural production and seek profits in both cash and kind.
Last but not the least, you can purchase real estate and sell it at a later point in time and rest assured to receive a sizable profit. The price of real estate appreciates significantly and you are sure to make profits from buying and selling it! However, the key to ensuring you get a good price for your house is to consistently upgrade it. A well-maintained, trendy home is preferred over a shabby, basic one.
There are several other means of optimising your profits from real estate but running a quick analysis of your preferences is recommended. Make real estate investments in Goa after carefully weighing all the pros and cons so that you can make an informed decision!
You may also like to read our blog to understand why luxury real estate is booming and whether the new airport will boost demand for luxury homes in Goa.
Various Ways to Profit from Real Estate