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The 4 Basics of Real Estate Investing

Real estate investing is a mix of Monopoly and Risk. You buy up property and make money on your investment, but it never comes without the chance something could go wrong. Everyone wants to play the game, but you must take care to understand the rules.

Ali Safavi Real Estate’s 4 Ways To Make Money Investing

  1. Appreciation Most people assume their real estate will appreciate in value over time. Perhaps a new shopping center, stadium or school is opening in your area – that will cause the land to become more valuable, and in turn your home is worth more. Remember, this is not a guarantee.

  2. Cash Flow Income This type of real estate investment focuses on buying a real estate property, such as an apartment building, and operating it, so you collect a steady stream of cash from rent. Other cash-flow opportunities can come from well-run storage units, car washes, apartment buildings, office buildings, rental houses, and more. This is typically scene as a more sure bet than just relying on appreciation.

  3. Income It is income generated by "specialists" in the real estate industry such as Ali Safavi Real Estate, who make money through commissions from buying and selling a property. This type of real estate related income is easy to understand. For example, a hotel management company gets to keep 5 percent of a hotel's sales for taking care of the day-to-day operations such as hiring maids, running the front desk, mowing the lawn, and washing the towels.

  4. Ancillary Income For some real estate investments, this can be a huge source of profit. Ancillary real estate investment income includes things like vending machines in office buildings or laundry facilities in low-rent apartments. In effect, they serve as mini-businesses within a bigger real estate investment, letting you make money from a semi-captive collection of customers.

This only scratches the surface to real estate investing. We recommend finding a mentor, someone who can answer questions and point you in the right direction. One tip we always stress is to not put the investment property in your name. Use an LLC or some other legal entity. This protects your personal wealth should things go south.

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