You may know that it’s possible to make money in property; you probably know of some wealthy people that own property. But did you know that you could be financially free using property? So how do you actually make money from property?
If we take the question at face value and give the simplest answer, it can be applied to most assets.
What is an asset?
An asset is something which value can be attributed to. Defining value in monetary terms (as opposed to emotional or sentimental) leaves us with things like these as assets:
- Property and Land
- Precious metals
- Stocks & Shares
- Patents & Trademarks
An then some examples of less traditional assets
- Pokemon Cards
- Comic Books
And my favourite:
- NFTs… (Nonfungible Tokens) These really get me! e.g. Founder of Twitter sold the digital rights to his first tweet for £2.1m
So when you own an asset, how do you make money from it? There are literally just 2 ways to make money from property:
- Through Income (regular payments to you from a third party)
- Through Capital Appreciation (the value of your asset going up)
Capital Appreciation tends to be generated by:
- Waiting – property values tend to increase over time.
- Redecorating / Refurbishing
- Extending / building up
- Splitting the title
- Extending the lease
- Making a property mortgageable
Income tends to be generated by charging a tenant or guest for the use of your property.
This could be buy renting a room out in your own house, renting a whole property out, renting individual bedrooms out in a property as a House in Multiple Occupation, short term rentals through Airbnb, renting a property from someone then subletting it (with their permission) for a higher total amount (known as rent to rent) the list goes on and we’ll look into these in detail in other articles.
How Much Money do I need to buy a property?
For both capital appreciation and income, there are many ways you can structure a deal meaning you don’t have to actually buy a property to benefit from money generated.
Search for Propertunities on YouTube to see more detailed explanations on the strategies, or browse the property section on this website for more information.