James Donaghue Blog

June 20th, 2014 Real Estate Investment Income – Where Can You Start Earning a Profit?

Investing in real estate is not a one-time thing. It is not something that lets you retire and spend time bathing under the sun in a beach after spending dollars for a rental property. But, it does allow you to build up passive income gradually as time passes. The thing is it can only lead to that after putting lots of active work for income to build up and be a passive one. It is the reason that makes investing in real estate a lucrative opportunity.

There are 4 facets in real estate investment. These 4 explain why real estate can be lucrative. All 4 are under the income-producing investments side of real estate. These are the means on how you can effectively earn real estate investment income.

Income-producing investments are categorized into 4, which are offices, retail, leased residential and industrial. The 4 are major types of income-producing investments with mini-storage, senior care housing, hotels and parking lots as the less common. From its name, it means that it produces income.

Non-income producing investments include houses, vacant commercial buildings and vacation properties. All of which can be as sound as the income-producing type. However, investing equity in this type does not involve receiving any rent pay. The only return to be received is in the form of capital appreciation.

Primary Types of Income Producing Investments

Offices are considered as the flagship investment for almost all real estate owners. It is often not just the largest, but also the highest profile type of property due to the locations it is typically situated in. Offices are either sprawled in suburban office parks and downtown cores. The demand in this type of property is tied to the office workers needed by the company. An office typically needs to fill finance, insurance, real estate, services and many more departments. All of which are also in demand currently in every office space. The downside in investing in this type of property is the high operating costs. Every tenant loss has an impact on the returns.

Retail properties include single-tenant buildings located in pedestrian zones and enclosed shopping malls. What are in demand today are retail properties that are in power center format since it means easy access to roadways and greater visibility. Many of these properties have anchors. These anchors add to the desirability as an investment property. One good example for a famous anchor retail property is Wal-Mart.

Industrial property is referred by the average real estate investors as their staple. It requires smaller investments, less intensive management and lower operating costs compared to retail and office properties. This property has different types and is categorized depending on its use. Many factors need to be considered when investing in this type of property like its location in connection to transport routes. It is better to invest in one that covers all factors to ensure better return.

Multi-family residential property is the type that delivers the most significant returns because of its stability. It is due to the thought that people will always need a living place regardless of the economic status. As a result, occupancy in these properties always stays reasonably high.

These are the types of properties that you can choose to invest in to earn income if you are interested. You can also achieve success in this field like the real estate investors you know.  Just know how to analyze the real estate market in connection with these real estate properties to pick the one where your investment will be more fruitful.

 

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