- Thrive Mortgage Co.
3 WAYS TO MAKE MONEY IN REAL ESTATE
There are 3 common ways to make money when it comes to real estate investing. Of course, there are a lot more than that but here are the 3 common things we look for in a real estate investment.
1. Cash Flow
This is the most common one but also the hardest to find you live in a major city. The reason for that is because property prices are higher but it’s still possible. Cash flow is the difference in amount of money you’re earning in rent vs. The amount of expenditures on that property. So, for example, if you have a mortgage payment, property insurance, strata fees, or property taxes, that would come out from the amount of money you earned from rent.
This one is the wild card and can’t really be banked on. Typically speaking, if you are in the Vancouver area, it’s safe to say that we can use a minimum appreciation of 2.5% year over year. This is you making money just by the property value going up.
3. Principal Reduction
Just by having someone renting out your property and paying down your mortgage, you’re going to have principal reduction. This is them paying it off for you, which is nice. BONUS: Sweat Equity This is where you go in and increase the value of the property by making changes, maybe even improving the kitchen or putting on some paint. Those are 3 plus one bonus way of how to make money in real estate. If you would like to learn about other ways feel free to reach out!
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