When investing in real estate, the main goal for the investor is to make their money work for them so they earn a return on their investment. While investing in real estate can be a complex process with many factors involved, there are five simple ways investors can make money.
In real estate, appreciation is when a property increases in value. This could be due to a change in the market, such as land or properties becoming less available or busier. With appreciation, value can increase even if there isn't a change in the physical property. When there is a limited supply of property, a raise in price will reflect the demand. For example, a two bedroom apartment in Los Angeles may cost more than a two bedroom apartment in Omaha, Nebraska simply because the demand for housing in Los Angeles is higher than in Omaha.
Real estate investors earn income from cash flow when tenants pay rent. This type of investing simply focuses on the investor buying a property such as an apartment building, rental house, office building, or storage unit, and operating it in order to collect cash from tenants who pay to use the property for a set amount of time.
Property development produces income for real estate investors through the process of building or renovating physical property. As an example, an investor might buy a plot of land and build an office building on the land. The investor can then sell the land for more than it was purchased for because land with a building on it is generally more desirable than the land on its own.
Income from ancillary sources provide profit within a bigger real estate investment. Examples of ancillary sources of profit within a real estate investment can include laundry facilities in apartment buildings, vending machines in offices, application fees, furniture rental, short term lease agreements, storage, parking passes, late fees, and pet fees. This form of income is non-rent income and can even increase the value of an investor's property.
Real estate investors that are specialists generate income in their industry by having a service or specialty. Real estate brokers can make money through direct commissions on a sale they make, and can also make commissions if they have a staff of agents working under them. Another specialty within the real estate industry is property management. Property management companies earn money through running daily operations of a property..
10 Summer Energy-Saving Tips
It's all too easy end up with a high energy bill during the hottest months of the year. When it's sweltering outside, air conditioning feels like a necessity, but utilizing these ten energy-saving tips and habits can help you maximize your energy usage and save money.
1. Schedule air conditioner maintenance. Having an HVAC technician clean and care for your air conditioner can prevent breakdowns and help optimize energy usage because your air conditioning system will be running in good working order.
2. Clear vents. Move any furniture, rugs, or objects in the way of vents so your air conditioner can cool your whole home effectively.
3. Insulate. Make sure to check for any air leaks in your home and insulate them to keep hot air out and cool air in.
4. Use fans. Using ceiling and pedestal fans can allow you to keep your thermostat at a higher temperature without losing the comfort of cool air. Be sure to turn your ceiling fans counterclockwise for the summer season.
5. Keep windows covered. While the sun casts a beautiful glow in a room, it heats your home up a lot and can raise your energy bill significantly as your air conditioning continually works to cool your home. Closing blinds and curtains in rooms that face the sun will help you save money and keep your home cool.
6. Use appliances wisely. Using large appliances, especially during the day, can use a lot of energy. Try using your grill and microwave more than the oven or stovetop in the summer and run the dishwasher, washing machine, and dryer at night.
7. Replace windows. If it's within your budget, replacing old windows with new, energy efficient ones can make a big impact on your energy savings.
8. Set your thermostat high. Setting your thermostat as high as comfortably possible to keep the difference between indoor and outdoor temperatures as small as possible saves energy because the your air conditioning won't have to work as hard to maintain a cooler air temperature.
9. Upgrade. Upgrading to LED lightbulbs, a smart thermostat, and energy efficient appliances may cost a bit, but are a worthy investment for energy savings in the long run.
10. Turn off lights. As a general rule of thumb for energy efficiency, turn off the lights in a room if you won't be in there for 15 minutes or more.
Four Questions to Ask When Buying or Selling Real Estate in the Marcellus Region
Buying or selling any property can be a complex matter. In the Marcellus region, homeowners have a more daunting task: how to evaluate a real estate transaction when oil and gas rights come into play. Below are four things to keep in mind when buying or selling in the Marcellus region.
1. How Will a Lender View the Property?
Every bank has their own set of criteria for what they are willing to lend on. If you have a well on the property, or specific terms in your lease allowing a well pad, it can complicate the mortgage process. As a seller, your lease terms and surface activity could limit the number of buyers who can purchase your property.
2. Does the Seller Truly Own the Gas and Mineral Rights?
As a buyer, the only way to ascertain whether or not the seller owns the gas rights they intend to convey along with the land is to have an oil and gas title search performed. This is separate from the title search customarily performed by a closing/title company prior to purchase, and regular title insurance will not cover oil and gas rights.
3. How Does the Current Lease Affect the Use of the Land?
Gas leases contain many provisions for land use, such as granting the lessee permission to build a well pad on the property or construct pipeline that runs through the property. This can potentially affect where you can build a home, pasture animals, or raise crops.
4. How do the Gas and Mineral Rights Affect the Property's Value?
The property value can vary greatly depending on whether the gas rights are leased, whether royalties are being paid, the location of the property, which companies are drilling in the area, whether the gas company has pipeline or well pads on the land, and the terms of the lease.
Have More Questions About Buying or Selling Real Estate in the Marcellus Region?
The real estate professionals at Southbound Enterprises regularly work with gas leases, pipeline agreements, and subsurface valuation. If you’re thinking of buying or selling in the region, let us help you answer these questions!
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