18 Ways To Make Money From Property

You always hear of people who made their money using property and think you wish you could have done that – starting a few years earlier.

Well, the good news is that it is not too late. Not yet!

All you have to do is empower yourself with the right knowledge, take the responsibility to learn, and then “just do it”.

Sounds impossible? Or too difficult?

The answer is no – it is very possible and very easy, once you know what to do.

Here is a quick summary of some of the different ways you can make money using property.

We are all different and therefore it is best that you find a way to invest that is best suited to your personality. Not all of us want to become the next Donald Trump, but most of us are prepared to put in the time and effort to learn how to do it.

Start here – make sure you always do the research and double-check the numbers.

The only way to do that and get the guaranteed results that you want is to learn what to do, and the secret is the growth on your money that you invest into a property, not the property itself!

This can be done with a program like the Property Pro Investment Program™. Without this it will be impossible to calculate the growth on your investment in property.

Make sure that you understand the risk that is associated with each method and property in general before you decide to start making money from property.

Also make sure that you know how long you want to invest and what your exit strategy is going to be.

Here are 18 different ways to make money from property:

  1. Buy-To-Let

Buy-To-Let is a British phrase referring to the purchase of a property specifically to rent (let) it out.

A buy-to-let mortgage (bond) is specifically designed for this purpose.

This method involves buying a property (using other people’s money, i.e. the bank) with the express purpose of renting it out and eventually making a profit from the rental.

  1. Rent-To-Own (aka Lease To Own)

A lease-to-own property purchase (also “rent-to-own purchase” or “lease purchase” or “lease to purchase option”) is a lease combined with an option to purchase the property within a specified period.

The lease regulates how the rental will work out for a set period.

After that period, the buyer has the option to purchase the home.

A portion of the rent is usually set aside in a rent-to-own contract as part of the down payment needed to buy the home.

  1. Rent-To-Rent

Very similar to buy-to-let: this method involves renting a property cheaply in order to rent it out for a profit.

It is important to ensure that your lease allows for sub-letting before you consider a property for this purpose.

  1. Property Development

A property developer is a professional in the sector of property development.

Some of the responsibilities of a property developer include purchasing land for new buildings, signing leases for existing properties, improving and renovating existing buildings and selling properties.

To become a property developer, an individual should have a good knowledge of the local real estate market and a good head for figures.

  1. Property Speculation (aka flipping)

A type of real estate investment strategy in which an investor purchases properties with the goal of reselling them for a profit.

Profit is generated either through the price appreciation that occurs as a result of a hot housing market and/or from renovations and capital improvements.

Investors who employ these strategies face the risk of price depreciation in bad housing markets.

Investors can execute this investment strategy in several ways. For example, investors that prefer a short-term approach might buy several properties with mortgages and then hold them for only three or four months in the hope that their value will increase. Conversely, an investor can take a longer-term approach by buying a single, moderately priced property and renovating it to “flip” it for a profit.

  1. Renovate to Sell

To renovate a property in order to sell it simply means you buy a dilapidated house with a lot of potential, fix it up and sell it at a profit.

A good example of renovating a house for this purpose, is when you buy a falling-down old house and install new wiring, plumbing and fix all the problems so the house is as good as new.

  1. Renovate to Rent

The same as renovate to sell, but your intent is to keep it and get more income from the property than the cost of the renovation.

  1. Repossessed property aka PIP’s (Property in Posession)

Should the owner of a property fail to make the repayments, the bank will eventually repossess the property.

Attorneys take legal action and a High Court judgment is obtained against the defaulter. The property is attached and the sheriff sells it at a sale in execution.

If the bank’s reserve price can’t be achieved at the auction, the property is bought into possession, meaning the bank now owns the property.

When you focus on buying PIP’s from banks, it is important to negotiate with them to get the property at below market value in order to quickly re-sell at market value or even below market value so that you are in a position to make a substantial profit.

  1. Investment Consortiums

Investment consortiums allow its members to combine their available funds in order to purchase investments that they would not be able to afford or qualify for independently.

Make sure to choose an investment consortium that suits your individual property strategy such as buy-to-let or property development etc.

  1. Property Syndication

Property syndication is a direct property investment where the smaller property investor with limited available capital has an opportunity to invest in commercial, retail or industrial properties.

Another example is a holiday home, but normally this is for private use and not for renting it out at a profit.

  1. Venture Capital

Some investors have relatively deep pockets and this allows them to invest into high yield projects with minimal effort but slightly higher than average risk.

This means that a developer can go to such a venture capital investor for investment into the property development project if the developer is unable to obtain full funding from a commercial bank.

  1. Distressed properties

Mortgage borrowers, who can no longer pay for their mortgaged property, may opt to sell their property in order to pay the mortgage.

Examples of situations where distressed sales occur include divorce, foreclosures or relocations.

13. Real Estate Investment Trust – REIT

TYPES OF SA REITs:

All SA REITs own income-producing property. Prior to SA REIT legislation there were historically two forms of listed property investment entities in South Africa: property loan stock companies (PLSs) and property unit trusts (PUTs).

Both were able to adopt the REIT regulatory framework set out by the Johannesburg Stock Exchange (JSE).

The structure is flexible and allows SA REITs to be managed internally or externally, and caters for different equity structures that may exist, such as A and B linked units that have different rights that existed in some property loan stock companies.

Most SA REITs own several kind of commercial properties like shopping centres, office buildings, factories, warehouses, hotels, hospitals and even, to a lesser extent, residential properties, in cities and towns across the country.

Some even invest in properties in other countries.

Under the new tax dispensation, a SA REIT will be able to deduct all distributions paid to shareholders or linked unit holders as an expense.

  1. Off Plan Properties

Off plan investing is defined as buying property from developers before the building is completed, sometimes even long before the foundations are laid.

Buying a property off the plan means signing a contract to purchase a unit that is yet to be built. You can view the design and building plans but there is no physical property to see or inspect.

The reason many people like to buy off the plan is that they hope the property will be worth more when it is completed so that they can sell it for a profit.

  1. Estate Agency

Estate agents sell or let residential or commercial properties, businesses or land on behalf of their clients in exchange for a commission.

The commission is not fixed and should be negotiated for each deal.

  1. Letting Agency

A letting agent is a term for a facilitator through which an agreement is made between a landlord and tenant for the rental of a residential property.

A letting agency will normally charge a commission for their services, usually a percentage of the annual rent.

Yet again this is not a set rate and should be negotiated.

  1. Managing Agency

Property management involves the processes, systems and manpower required to manage the life cycle of all acquired property as defined above including acquisition, control, accountability, responsibility, maintenance, utilization and disposition, but at a fee.

Yet again these fees should be carefully negotiated.

  1. Property Crowd Funding

Crowd Funding is the use of small amounts of capital from a large number of individuals to finance a new business venture.

Crowd Funding makes use of the easy accessibility of vast networks of friends, family, colleagues and acquaintances through social media websites including Facebook, Twitter, LinkedIn and also Google+ to get the word out about a new business or property deal with the intent to attract investors.

Summary

As you can see there is no shortage of methods to make money from property.

With property investments the more competent you become the smaller the risk will be.

To see an actual case study of how my worst property investment outperformed the best “conventional unit trust investment” by more than 1338% over a 10-year period click here or copy and paste the link below on your browser
http://blog.hannesdreyer.com/video-case-study/

 

Book for a Free Property Investment Seminar near you:
http://seminars.hannesdreyer.com/



 

About The Author

Hannes Dreyer

Wealth Creator | Mentor | Coach - Dr Hannes Dreyer is one of the world’s leading authorities in Wealth Creation. As a speaker and author on the subject he is at the forefront of his personal development industry. He is the founder of the Wealth Creators University, a private education organisation based on the culmination of 30 years of experience, research and study info finances, economics, psychology and philosophy.

14 Comments

  • Audrette

    Reply Reply September 18, 2017

    I was looking for blogs to express how things has changed in the rental market, from the tenants point of view to an owner or investors point of view, the idea came to me as we are once again stuck in finding a property to rent that we can afford, but a two bedroom is out of the question cause I cannot put a teen girl and teen boy in the same room, when it comes to buying our own place well we will be more than happy to if a bank should one day approve a bond for someone who gets paid every forth night! So now I get to use my Facebook account to blog my concerns about rental property!

    What is a property investment?

    Then…Well once you as a owner buy a property you think of renting it out to good tenants TPN (ITC check)…in the past the owner or agent on behalf of the owner will ask a certain amount of rent that is the rental amount will either HELP the owner to pay of his bond (not the complete monthly amount) quicker or it will serve as an extra income to the owner until the bond is paid of so that the property can indeed become an investment and he will still earn an income of the rental amount. An investment will only become one once it is paid of, to ask a tenant half of your bond cost for rental amount is not bad at all and you have a tenant for a long term should it be a year or 5.

    Now… owner buys property, rents it out with the idea that a tenant pays his bond and in the first year a tenant defaults, cause he/she cant afford the rent no more, how did you get approved for your bond in the first place if you cannot afford to pay your bond! 1. Bond not the tenants responsibility, 2. Rates and taxes not the tenants problem. 3. Levies also not the tenants problem. The only thing a tenant should be stressed about is the rent, Water/lights including the utility account, for wear and tear in a property is one thing you should invest to as well and minor damages like dirty carpets, broken windows things that the tenant indeed damaged is why you get a deposit, for bigger problems like with electricity ( shorts, loose cables, etc) and water (geysers, leaking taps, burst pipes etc) is why owners should have home owners insurance, to give a tenant all the extras that you as a owner is supposed to pay does not make you an investor it only makes you a greedy owner or for an agent to agree with the owner and not help them right for there own benefits and bigger commissions makes you just as greedy!

    Yes I have experience in the rental property market not just for the last place I worked but in various other companies, HAPPY TENANT HAPPY OWNER, trust me the higher the rent wont keep bad tenants out it will only create a lot more problems, grey hair and lots more for you as the owner, rather lose R4000 than losing R10 000.

    Single people can happily rent cheaper cause of not having dependents, for a normal family of 4 or 5 meaning mother, father and 2 children or 3 on a middle class salary cannot afford to rent n house nor a townhouse anymore, I’m not talking about a mansion or a 400m2 townhouse, I’m talking about a normal size say 110m2 middle class size property.

    Just something to ponder about for future investment owners!

  • Zoleka Heshu

    Reply Reply April 22, 2017

    Good Evening Dr

    We are a group of 3 ladies,intending to invest in property business.

    We would love to attend one of your seminars,but there is not one yet in Port Elizabeth,are there any possibilities that you might have in Port Elizabeth.

    Thank you
    Zoleka Heshu

    • Hannes Dreyer

      Reply Reply April 23, 2017

      Maybe attend one of my property webinars. The are available in PE if there is a good internet connection.

    • Joyce

      Reply Reply May 20, 2017

      Evening Dr, I am in East London, I’m interested in attending your workshops do you usually have them in East London?,if so please notify me

  • I also think that its important to know what you are buying the property for before buying. Because if its for rent say its for residential, you need a property close to the CBD because rent increases with decrease in distance from the CBD. If its for own occupation you need a property away from the CBD because these suburbs are peaceful hence good for the family.

  • Sihle

    Reply Reply October 7, 2016

    Helo Dr

    I am so excited and looking forward to attending tomorrow’s seminar in Durban!

  • Zinhle Masemola

    Reply Reply June 22, 2016

    Kindly Accept my apology asI will not be able to attend the seminar. my humble apologies. Please consider me for future seminar.

  • Refentse Semenya

    Reply Reply June 22, 2016

    Good Day,

    Please be advised that I will no longer be available to attend the seminar due to unforseen personal commitments. Do accept my apology and kindly keep me posted on future seminars that I can attend to enrich myself.

  • Hosting

    Reply Reply June 5, 2016

    There are many ways to make a house pay for itself, or at least boost your income. Savvy homeowners can maximise their investment, but there are pitfalls that need to be avoided. Be smart, take a long-term view and you could be sitting pretty in a few years. Here we pick the best ways to make a profit from bricks and mortar.

  • ANDRE ROUX

    Reply Reply June 3, 2015

    Hannes,Dankie dat jy my op jou kontaklys hou,ek begin die 4de met n 12 maande opleidings program waarna ek my eie agentskap gaan registreer.Ek is tans die bestuurder,en die voorsitter van Seapark deeltitelkompleks in Melkbos,die trustees het goedkeuring gegee dat ek my studies voltooi,dit gee my ook kans om n bietjie die deeltitel omgewing van nader te bekyk.Ek steun jou program ten volle en gaan beslis n bemarker van jou seminare wees.Ek het nog nie n prinsipaal of agent met woema! raakgeloop nie.

    Hou my asb op jou lys,

    Groete,

    ANDRE ROUX

  • Abram Bore

    Reply Reply June 3, 2015

    Good evening Dr

    I have three properties that I still owe the bank. I am 55 years and would like to resign from my current work as the conditions are no more favourable. My pension pay-out will be around R1.2 m before tax in July 2015
    .
    I intend to resign and find another job i.e. I have opened da private practice whereby I sell medical equipments

    Our current house where we stay also ahs a deficit of around R450,000. which I thought if a I pay it off with part of my pension pay-out, and close the second town house by around R320.000, I may survive for some months before the Medical Technology business kicks off.

    Please advise

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