Properties are not only built to be your home, it also can be an investment and keeps your money rolling. This is a guideline on how you can turn property investment into a money-maker.
Property investment has been a favourable option for many people, especially in Malaysia. It is known to be one of the best investments for those who seek to have better financial future. Thus, it results in increasing number of property investors in this country.
There are plenty of properties in Malaysia that can be valued for investment. It includes house, such as single-storey, double-storey terrace, apartments, condominiums, retail space, shop lots or even land.
However, not all real estate can make a good investment. There are many factors should be taken into consideration when choosing a property, such as location, reputation of developer, type of property, accessibility and amenities.
Don’t worry, you are not alone in this journey. This is a guideline for you on how to make money from property investment.
What is Property Investment?
Before you roll into this area, you need to know what property investment actually is.
Property investment basically refers real estate property that is purchased with intention to earn money from it. In simpler words, it is considered as investment when you earn a return from it either through rental income or future resale of the property.
This kind of investment can be a short-term investment or long-term endeavour. As for the short-term investment, investors usually do flipping – buy a property, then remodel or renovate it and sell it at a profit within a short time period.
It is worth to note that investment properties are not used as primary residence. The properties are utilized to generate income, not as a home.
Why Invest on Properties?
Property investment is safer and less volatile compared to stocks, gold or currency. Even if the investment is done during the wrong time, it would recover as development occurs. As the market improves, the value of your properties will increase.
Real estate has a high tangible asset value. There will always be value in properties and lands. On contrary, other investments can have little to no tangible asset value, such as stock can dip to zero.
6 Ways to Earn Money from Property Investment
There are a handful ways to create cash flow in property investment. You are not limited to only one way to have money-maker from this, but six ways. Each of it may involve different types of properties with its own pros and cons.
1. Residential Investment
Residential investments refer to investing in residential properties, such as terrace houses, apartments, condominiums and other types of properties that come with residential titles. It is a popular investment among investors.
You can purchase a residential property and either:
Rent it out to tenants and collect monthly rents. For buy-to-let investment, you need to know what type of property you are buying, who will likely rent is and where it is located.
Sell it to buyers at a higher price. Buy-to-sell requires you to have the ability to hold the property until it is sold.
2. Commercial Investment
Commercial investment refers to investing in properties with commercial land title. Commercial properties are for business purpose only, which the units are typically leased out to companies and small business owners. It comprises mainly of:
- Office buildings
- Small office versatile office (SOVO)
- Small office flexible office (SOFO)
- Small office lease office (SOLO)
- Small office smart office (SOSO)
- Small office home office (SOHO)
- Shop lots
Usually, commercial properties are involved in multi-year leasing. This results in a greater and more stable cash flow despite the weak rates of market rental.
3. Retail Investment
Retail property investment is almost similar to commercial investment. It differs slightly in term of mechanics and prime locations. Retail properties are usually located in malls and other retail storefronts.
Fascinatingly, this investment is a combination of property and business investments. In a way, you can kill two birds with one stone!
4. Industrial Investment
Industrial investment is investing in industrial warehouses or storage units that can be utilized for industrial purposes. It holds as distribution centres over long-term contract and generates high level of income from rental and resale.
This type of investment is considered as more risky compared to residential and commercial investment. After all, it is a very niche market and requires specialised professionals’ expertise.
5. Real Estate Investment Trusts (REIT)
This is a tad bit new way to invest in property. Investing through trusts refers to buying shares of corporation that owns real estate properties. In return, you will receive dividend as income.
In fact, you can invest in any industry you are interested with. For example, you can invest in hotel if you are particularly interested with hotels. Unfortunately, it also means that you do not actually own the property.
6. Property Speculation or Flipping
Last but not least, you can do property investment with property speculation or flipping. It is almost similar with buy-to-sell, but it requires one extra step – remodel or renovate.
There are two ways you can do this:
- Buy a cheap or below market value property and sell it off
- Buy a rundown property at a good price, refurbish or renovate, and sell it after
Property Investment with Ererealtor
Interested with property investment? Ererealtor can help you!
Ererealtor is a real estate agent specialized in residential real estate. Ererealtor is ready to assist you search for available properties that match your price range and investment plan.
You can also check out Ererealtor’s listings of properties available. Who might know, one of it (or more!) would catch your eye.