5 Tips on Making Money Through Real Estate Investing
Real estate investing is an exciting, yet risky game. Before you begin to buy up properties left and right, it’s important to understand the specific moneymaking strategies involved in this type of market. Here are the common ways real estate investors generate income:
1. Appreciation You may have noticed that the real estate market in Southern California has appreciated as a whole over time. What was once a $200,000 home in Newport Beach is now well over $1 million. This strategy takes a lot more time, unless something makes your property more attractive in the short term. For instance, if a large company or shopping center is built next door to your home, the value of your property could sky rocket due to more foot traffic. Real estate appreciation is considered more risky than cash flow income.
2. Cash flow income Cash flow income refers to properties that are bought with the intention to rent out space for tenants. This allows for a steady flow of cash and can operate as an apartment building, commercial property, shopping mall, storage unit, and much more. A new trend that is blowing up in the cash flow income sector is coworking spaces such as WeWork in Irvine, CA.
3. Real estate related income This area of real estate investing is for specialists such as real estate brokers or real estate management companies. Real estate brokers will match buyers with sellers and make a commission off of the sale (learn more form the Danny Buys Houses service). On the other hand, real estate management companies will handle the day-to-day activities of the property such as collecting rent from tenants or, in a hotel’s case, hiring maids to clean the rooms. These companies will then make a percentage of the businesses’ incoming profits.
4. Ancillary real estate investment income When you own a property such as a hotel or office building, you can make a large sum of money from the services and operations inside the business. This could include snack machines, parking garages, coffee sales, etc. Although this may seem like a few dollars at a time, these specialty services can build to become an entirely new source of income, apart from the real estate property itself.
There are plenty of ways to build a hefty income from real estate investing in Southern California. If you are having difficulty qualifying for a loan for your business or rental property, call JCAP Private Lending. JCAP may have the simple financing solution to begin your real estate investing today!
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JCAP Private Lending is a Direct Lender who closes and services Investor Funded Short-Term Real Estate Loans. Our experienced team has been providing quality mortgage services for over 30 years. JCAP Private Lending is an Asset Based Lender who steps in to quickly solve a short-term financial need secured by Real Estate. JCAP has an innovative approach to lending, focusing on speed, simplicity, and safety for borrowers and investors. JCAP’s operating philosophy is defined by the simple but impactful statement — “We Care & We Serve”.
Located in Newport Beach, CA, JCAP Private Lending primarily lends Hard Money & Private Loans secured by 1st & 2nd TD’s on residential property in Coastal California.