How Do Real Estate Investors Profit?

How Do Real Estate Investors Profit?

Asset Appreciation

A real estate property appreciates in value due to several factors including:

Lack of free land to build more houses as demand for housing increases. Scarcity leads to price appreciation.
Construction of major infrastructure such as malls and highways near the property thus increasing its accessibility and convenience.
Upgrade of the property with newer amenities.
An upsurge in the economic conditions of the region, turning it into a growth area.
If all the above happens, your property becomes attractive to potential buyers or renters and you can dictate the price.

Rent income

This is also known as cash flow income. Here, you acquire an apartment building and then lease it to one tenant or a host of tenants where you will be collecting rent at the end of every month (year). Consider renting your property as offices, rental residential houses, car washes, storage facilities etc.

Commissions for Buying and Selling Real Estate

This is the money made by real estate brokers who get to keep a percentage of the money paid by the buyer after they sell a property on profit.

There is also the real estate management companies who collect rent on behalf to the landlord and then get to keep a small percentage of the rent money. The real estate management firms run the day to day operations of the estate such as orientation of new tenants, hiring plumbers and electricians to fix faults, ensuring the neighborhood’s security etc.

Ancillary Income

Another way investors in the real estate industry make money is by installing ancillary profit generating infrastructure within the estate. This infrastructure may include vending machines, laundry facilities, ATM’s etc.

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3 thoughts on “How Do Real Estate Investors Profit?”

  1. Oboni Ojochenemi

    I have a proposal for your company, it quite profit.although in this case your company will finance.contact me with the following number if your interested (09099477585)

  2. Abuja Investments Company Limited is one of the companies found on the list of property developers in Abuja, the capital city of Nigeria. Abuja Investment Company Limited is owned by the Federal Capital Development Authority (FCDA) and serves as the flagship investment and holding company for the FCT. They offer clients investment opportunities and professional financial advice. Their vision to build capacity in public private partnership administration and asset management for sustained development. The services they offer include Business Development, Project Management, Venture Capital, Real Estate Development, Facility Management, Leasing (Vehicle, Equipment, and Real Estate). The company has also built a number of housing estates in Abuja like AICL Apo Dutse Housing Estate, Amina Court, Apo-Dutse, Gudu District, Abuja (FCT) among other projects.

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