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How can you make passive income in real estate to boost your net worth?

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Passive income is making money through assets where the owner buys the assets and is not actively involved. This is the type of income where the owner’s money works for them without their effort. There is a typical misinterpretation that automated revenue land requires no exertion. In any case, contingent upon the kind of rental system you execute, resource proprietors need to lay the basis to begin producing pay. When you have the rental going, your space will turn out leftover revenue without partaking in everyday work. Numerous proprietors have amassed significant abundance through the standard rental methodology. Financial backers buy homes or business spaces and lease them out. As a property manager, you acquire repeating pay each month.

Throughout history, there has never been a 15-year period that real estate has not appreciated. You can even increase your overall return by leveraging your investment. You can control a property with a 20% investment yet gain an appreciation for the entire value of the property. The opposite is also true if it depreciates, which refers back to the historical trend of real estate, which is why long-term investments are appealing.

Here are some ways you can make passive income in real estate to boost your net worth.

 

  1. Trusts that invest in real estate (REITs)

Go for REITs if you don’t want the hassle of managing one or more individual properties. REITs are real estate investment trusts or something similar. However, a typical REIT holds business buildings, not just any real estate. They can be office buildings, shopping malls, sizable housing complexes, hospitals, and other non-residential properties. REITs pay out dividends made out of the trust’s net income. But when the trust’s properties are sold, you’ll also get a piece of the capital gain. Commercial real estate has always been the most lucrative investment strategy. You will have the chance to invest in these properties through REITs, much like you would with equities. Shares in trusts can be purchased and sold by well-known brokerage companies.

 

  1. Borrow money

Real estate developers take on debt from non-banking finance companies, banks, or other institutional lenders. The lenders generally demand a higher interest rate from real estate developers because of inherent risks such as liquidity and execution risks in any real estate development. You will have tenants paying your mortgage, and as long as you make sure to pay your mortgage every month, you will continue to have someone else paying to increase your equity in your property. Later you can repay the debt by considering a professional debt consolidation service.

 

  1. Stock dividends

The simple way for investors to generate passive income is through dividend stocks. A portion of public corporations’ profits is diverted and returned to investors as dividends. Investors can keep their cash or invest it in more shares. Dividend yields can differ dramatically amongst businesses and might change yearly.

 

  1. Property crowdfunding

Another, more specialized approach to investing in real estate is through real estate crowdfunding. They allow you to invest in highly specialized real estate ventures, which explains why. Two completely different investments are available on the platform. The first is an eREIT; a non-publicly traded REIT only offered through Fundrise. An eREIT allows for investments as low as $500. Over the past few years, the Fundraise REIT has generated returns averaging between 8% and 12% annually. The Fundrise eREIT invests in commercial real estate like office buildings and residential complexes, just like publicly traded REITs. However, the platform also enables you to invest in special real estate deals. This is accomplished through a Fundraise end, which necessitates a $1,000 minimum investment. Either undeveloped land is bought and developed for sale within the fund, or existing properties are bought, renovated, and then sold for a profit. It’s a chance to participate in the kind of real estate deals you wouldn’t want to do on your own but also yield high rewards.

 

  1. Rent your property

If you are planning to invest in real estate but planning to begin small, rent out a room at your house if there is any. It is easy to market the room, as websites like Airbnb allow a person to post about it. Those who found it suitable according to their needs contacted and booked it for themselves. An individual can even use social media platforms to do marketing. It is the best way to begin your real estate journey, as very little investment is required. It even gives flexibility to the person, as they can decide when to rent a room, for how long, and at what price. Just make sure to do proper research about a specific tenant before welcoming them inside your property.

 

  1. Long-term renting program

The other way to make money is by renting a property. Investors buy a property to sell it when the price increases; in between that time, they can rent the property to earn extra money. If a person is buying a property intending to put it on rent, it is when the location matters the most. The property must be near shops, hospitals, schools, parks, and other necessities.

 

  1. Private Equity

Real estate developers invite private equity players to invest in their projects by offering a share of the project to the private equity players. The Private equity players invest in real estate projects after comprehensive due diligence, including the builder’s track record, project specifications, and supply-demand equilibrium. Private equity players invest in real estate projects on a project-to-project basis and usually have a timeline for the exit.

 

  1. Customer advances

Real estate developers can generate capital from customers (home buyers) through advance payments. A Real estate project takes 4–5 years to complete. However, real estate developers usually start selling the housing or individual units to buyers from the beginning as per the construction-linked payment plan. The installments paid by the customers serve as the capital to complete the project’s construction. Real estate investments produce good returns long-term. These investments often have tremendous tax advantages. You get diversification to your overall investment strategy.

 

Conclusion:

You can depreciate your asset over 27.5 years and take advantage of this tax benefit helping to lower your overall taxable income on the property. An excellent real estate investment should cover your Mortgage, Maintenance, Management, Vacancy, etc., and still provide additional cash flow, which you can use to reinvest into more real estate or pay your bills. This attribute will ultimately be responsible for the “passive income” you are looking for.

 

Author’s Bio: This guest post was written by Lyle Solomon. Lyle has considerable litigation experience as well as substantial hands-on knowledge and expertise in legal analysis and writing. Since 2003, he has been a member of the State Bar of California. In 1998, he graduated from the University of the Pacific’s McGeorge School of Law in Sacramento, California, and now serves as a principal attorney for the Oak View Law Group in California. He has contributed to publications such as Entrepreneur, All Business, US Chamber, Finance Magnates, Next Avenue, and many more.

 

 

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Hong Kong Billionaire’s K. Wah Wins Shanghai Real Estate Bid, Sees “Excellent” Opportunity – Forbes

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Hong Kong billionaire Lui Che-woo has been making successful investments in Shanghai real estate since the 1980s, such as K. Wah Center set along the city’s swank Huai Hai Road. A new project coming amid the country’s economically painful zero-Covid policies took a big step forward on Friday when his flagship K. Wah International Holdings said it had won a joint tender bid for HK$4.18 billion, or $532 million, to develop land on the city’s western side.

K. Wah, though a subsidiary, will hold 60% of a joint venture in partnership with two state-owned companies to develop residential and commercial property in an area planned for artificial intelligence and healthcare-related businesses, the announcement said.

K. Wah said the project “represents an excellent investment opportunity for the group to be engaged in a transit-oriented development to expand its presence in the Shanghai property market, replenish the group’s land bank and is in line with the group’s business development strategy and planning.”

The announcement comes after China’s overall GDP growth fell to 0.4% in the second quarter from a year earlier. In Shanghai, where millions experienced lockdowns of varying duration in the April-June period, GDP shrank by 5.7%. China’s relations with the United States and Europe have been strained by Beijing’s close ties with Russia and recent military exercises near Taiwan.

Mainland-born Lui, worth $12.1 billion on the Forbes Real-Time Billionaires list today, moved to Hong Kong at age four. Possessing only an elementary school education, he helped his grandmother run a retail outfit that sold food staples in Hong Kong as a teenager. In the late 1940s he re-exported army surplus, and by 1950 was buying construction equipment from Japan and selling it to Southeast Asia. In 1964 his was the first private company to obtain quarrying rights in Hong Kong, thanks to a record bid.

After that, Lui started building undistinguished residential housing there. Lui was also an early investor in China, buying into a quarry in Shenzhen in 1980 and later acquiring a land bank in Guangzhou. K. Wah Center opened in Shanghai in April 2005; beside real estate, part of his fortune also comes from the Macau casino operator Galaxy Entertainment Group.

Another long-term Hong Kong success story in Shanghai property development, Shui On Land, led by billionaire Vincent Lo, noted in a filing last month China’s short-term business outlook faces uncertainties. “The Chinese economy faces considerable headwinds amid a highly uncertain geopolitical environment, tense U.S.-China relations, and tightening monetary policy in the advanced economies,” it said. “The property sector debt issue will take time to resolve. Still, the government has the policy means and experience to handle the developers’ debt restructuring process and address the suspended project issue.”

And yet Shui On, whose Shanghai projects include city’s iconic Xintiandi nightlife and shopping area, was nevertheless upbeat about the longer-term investment prospects there. “Although the immediate outlook is less than favorable, the impending market correction should enable us to acquire assets in prime locations at attractive prices during what could be a golden era for new investment,” it said.

See related posts:

World Will Have Nearly 40% More Millionaires By 2026: Credit Suisse

The 10 Richest Chinese Billionaires

Taxes, Inequality and Unemployment Will Weigh On China After Party Congress

U.S. Business Optimism About China Drops To Record Low

Pandemic’s Impact On China’s Economy Only Short Term, U.S. Ambassador Says

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Real estate markets slow in most nearby communities – Calgary Herald

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Reviews and recommendations are unbiased and products are independently selected. Postmedia may earn an affiliate commission from purchases made through links on this page.

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Slowing demand and rising supply in outlying communities like Airdrie have set in along with cooler temperatures of late summer, recent data shows.

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Calgary Real Estate Board statistics from last month show sales falling year over year in most communities while supply is rising.

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“In all those markets, we’ve seen improvements in inventory,” says Ann-Marie Lurie, chief economist with CREB.
“Still these markets remain quite tight, but we are seeing some price adjustments and that’s because they came up so high during the pandemic.”

Airdrie is the largest and most in-demand market with the highest sales last month, 169 transactions, down almost eight per cent year over year. Still, the community saw inventory rise more than 10 per cent with now more than 1.69 months of supply, an increase of nearly 20 per cent from last year.

Other communities have also seen sales fall and supply rise. These include Cochrane, which had 75 sales, down about 17 per cent from August last year. Its supply is now more than two months, up about 26 per cent year over year.
Okotoks had 53 sales in August, down about 19 per cent year over year while supply grew to more than 1.8 months.

Despite falling demand and growing supply, prices still grew year over year in these communities. The benchmark price in Airdrie increased almost 19 per cent to $493,500. In Cochrane, the benchmark price grew by more than 16 per cent to $517,400 while the benchmark reached $549,300 in Okotoks, also an increase of more than 16 per cent.

Chestermere saw the biggest drop in sales year over year at more than 48 per cent.

Only High River experienced a slight increase in activity with sales last month up 2.5 per cent versus the same span last year.

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Spotlight: Making sense of the current real estate market in Newmarket – NewmarketToday.ca

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Buying a home at any time is a huge undertaking. It requires a lot of preparation, time and access to expertise.

Homeowners—and those who wish to become one for the first time—have it even harder right now, with conditions seeming to change from month to month.

REALTOR® Dave Starr specializes in home buying and selling in Newmarket and the surrounding areas. With over 35 years of experience in the real estate industry, he is happy to share what he’s learned with others.

Slowing things down

So how would he describe the current state of the market in Newmarket? “It’s finally more normal and realistic,” he says. “A prospective buyer has a little more breathing room to make sure that their financing is in place and they can also consider a home inspection.”

A seller will benefit by working with a more seasoned agent, he says, because they have had prior experience with similar markets. He likens the situation to a professional athlete who has played in the playoffs before or competed in a large-scale event like the Masters in golf.

Earlier in the year, the market was not realistic.

That tended to leave buyers, sellers and agents scrambling. “The end result can be a situation with buyer’s remorse, where the buyer no longer wants to close on their purchase. The banks sometimes struggle with appraisals, which can also result in a non-closure,” he says. “In the fast-paced market that took place earlier, some agents potentially made more mistakes, especially since they weren’t experienced enough to handle multiple offers.”

Home inspections and interest rates

While some homes may not require a home inspection, there are lots that definitely need one. “In an extremely busy market, buyers could potentially end up with an unwanted surprise—at a great expense,” says the REALTOR®.

He likens it to the necessity of having speed limits on our roadways. The faster you go, the more chances you have of getting into an accident.

“We are now facing an increased mortgage rate, which many would not like to see, but the truth is it will help balance the market overall. Lower interest rates basically were one of the reasons for the inflated house prices and homeowners were simply taking on larger mortgages than ever,” he says.

For years many homeowners would tell him the same thing: that mortgage money was cheap to them. His answer to that never varied: “You do know you have to pay it back at some point.” If the rate were guaranteed for a lifetime, it would be a different story, but of course that’s not the way it works.

The market over the summer was slower but typical; that has become the norm over the past few years.

The fall market is already starting to pick up, with increased activity, though the number of listings in Newmarket is quite low. Rental availability is both quite expensive and experiencing a shortage.

Says Starr, “The market moving forward should remain stable. Buyers and sellers will have more time to make the best educated decision for their needs and wants.”

Whether you’re a buyer or a seller, he welcomes any calls or emails.

Let Dave Starr Real Estate help you make your next move. Call 416-520-3231 and get the Starr treatment you deserve.

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