How Lucrative is the Real Estate Business and Should You Invest?


Undoubtedly one of the most popular investments, the real estate industry has ben viewed as a very lucrative investment option. How much you can make profit and returns out of your real estate investment depends greatly on the your type of investment as well. There are a few ways to invest in the real estate industry, here are some of the most common ones.

How Lucrative is the Real Estate Business and Should You Invest?

Income properties

The term “income properties” refer to properties that serve a purpose to be rented out to tenants. These properties generate money over time. Depending on your type of property and your target market, the returns on your investment may be as soon as 12 months or several years.

It’s important to remember that the process of investing in income properties is far from a get rich quick scheme. It’s not something that you would expect a fast return from. It takes time AND work to make income properties work in your favor. Regardless, this option had stayed among the most popular ways of investing. It’s a solid investment that you can depend on as long as you stick to it and be persistent. You’ll see returns in investment soon enough as long as you keep your expectations realistic.

There are basically two types of income properties, which are:

  • Rental for residential purposes. The most common rental option that almost anyone with a property can start from. The residential rental properties are going to pay off as long as the property is occupied by tenants. Some of the most profitable areas where you can rent out residential type properties are places close to school, especially colleges or universities. Other factors are also at play. One of the most important one is employment growth as well as economic growth. Both of which would contribute greatly to population growth in an area. It’s also important to note developments in the area’s infrastructures. New bridges, new roads, and other things that contribute to a development of an area can all affect population growth. In turn, it would also yield more potential tenants and investment returns.
  • Commercial rental properties. The commercial real estate property business is undoubtedly the most lucrative among the two option. However this option often needs a rather high starting capital compared to the residential rental properties because of several factors; one, a property at a good, commercial spot tends to cost very high; two, the property would often have more square meters compared to residential buildings. If you have the resources to start on commercial income properties then it would be one of the most lucrative investment option for you.

Buy low, sell high

This type of investment is often referred to as “fixer uppers”. The returns of these property investment depends a lot on the property an investor managed to buy, as well as how much fixing costs.  When done right, the fixer upper method may gain you returns on investment on a relatively shorter time period compared to when you’re investing on income properties. Spotting areas that would see significant growth within the next years is also one of the ways to yield high return on on properties.