subject: An Introduction To Property Investment [print this page] An Introduction To Property Investment An Introduction To Property Investment
Many people want to invest their money but stocks, bonds and other such things do not interest some people because those investments are not tangible. You can't touch them so to some people, they feel less "real". Of course, with property investment, you will have a lot more hands on labor required from you than if you invested solely in stocks and bonds. The end result is worth it though. The financial gain and the pride that comes with property ownership are unbeatable.
Types of Income Producing Properties
You might think that any property would be an income producing property but that is not the case. You can buy yourself a vacation home for personal use. That is a real estate investment because you might someday see a return on it if you ever sell it, but it is not an "income producing" piece of real estate. You aren't going to pay any bills this month simply by owning it.
Some of the most common types of income producing properties are:
* Leased residential homes
* Office buildings
* Retail buildings
* Industrial buildings
* Self storage units
* Hotel
How You Make Your Money
There are in fact two ways you can and will make money with your property investments. The first way you start to earn money is through rent payments that you collect. Now, until your initial investment is paid off and only after monthly expenses for that property are taken care of will you start to see a real profit. Monthly expenses could include mortgage payments in your name, taxes, property insurance and any utilities or other bills associated with that property that you are responsible for.
The other way you earn on property investments is through capital return. Capital return is what the decrease or increase of the property value is. This will be determined by inflation and market demand. Your property must be properly appraised to determine what your true capital gain is. Basically, if you bought a house for twenty thousand dollars and it is later worth thirty thousand due to inflation, you have just made yourself some money.
Safe Investment
Many people say that property investment is much safer than any other type of investment. Of course, there will be people out there who will argue that point. There is always going to be a risk when you invest, no matter what it is that you are investing in. The key is to find what works for you. Some people flourish with real estate while others struggle. If you do your homework, make wise purchase decisions and manage the properties with care, you should have no problem making a decent return. Of course, the size of the return will vary from property to property.
If you want to invest in your future while making money right now, then property investment is the way to go. Remember, there is only so much land to go around so you want to make sure that you get your fair share!
