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Banking and Finance  » Making Money With Real Estate

Making Money With Real Estate

The many ways of making money with real estate include not only

the various types of property. Of course you can make money with

land, apartment buildings, homes, commercial buildings and more.

But with whatever type of real estate, there are different ways

you'll make your profits. Some of those ways, and how to

maximize them, are listed below.

1. Pay-down on the loan. Equity builds with every payment you

make. If you get the lowest interest rate you can, more of each

payment will go towards the principal.

2. Cash flow. Buy income property the right way, and you not

only have your tenants paying all the costs and paying down the

mortgage loan, but you also have positive cash flow. As a rule,

just don't buy properties without cash flow.

3. Value appreciation. Sometimes making money with real estate

can be as simple as holding on and waiting. For the most

appreciation in value, however, you should buy in an area where

demand is growing faster than the supply.

4. Tax depreciation. After all the tax law changes, you still

get to declare a loss for depreciation that doesn't really

exist. Saving at tax time, means more after-tax profit. To

maximize this, buy property that has its value primarily in the

buildings, because you can't depreciate the value of land.

5. Get instant equity by buying low. Buy below market and you

get instant equity that will be converted into a profit when you

sell. Offer a reason for the seller to sell low: fast closing,

cash, assume some debts or liabilities, etc. Alternately, just

make a low offer. A seller may have his own reasons to sell it

cheap. 6. Selling high. If you clean it up nice, make it easy to

buy, and find the right buyer, you'll get top dollar. The

following four on the list cover ways to create value, so you'll

get more when you sell.

7. Finance the sale. You'll often get substantially more for a

property if you offer financing. This is especially true if you

let someone buy it with little money down. You can also get good

interest on the loan.

8. Changing the use. Find a higher use for the property, and

you can convert it to make it worth more to the next owner. This

could mean making condos into apartments, or apartments into

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condos. Perhaps converting a home into office space will get the

biggest return.

9. Improve and repair. Repairing anything that needs it is

obvious, but you need to look creatively and carefully to find

improvements to make. Concentrate only on those that will raise

the value several times more than what they cost you.

10. Sell it in parts. Sometimes in real estate, the parts are

worth more than the whole. For example, splitting off an extra

lot to sell for $30,000 will rarely decrease the value of a home

by that much, so you'll make more money in the end.

Look at the sources of profit listed here, and think of how you

can use a few of them on your next real estate investment. You

can get wonderfully creative making money with real estate.

About the author:

Steve Gillman has invested in real estate for years. To learn

more, get a free real estate investing course, and see a photo

of a beautiful house he and his wife bought for $17,500, visit

http://www.HousesU

nderFiftyThousand.com