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Buying and selling property, how to make a profit out of it?

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The best way to make money in real estate is by appreciating assets, an increase in the value of the property. The main way a property can grow in value is by getting a mention on every interesting property list in up-and-coming neighborhoods. Therefore, having great locations and improvements, or constant modernization of spaces is always a plus.

A property can also generate revenue from rents for both commercial and non-commercial use. In addition, established companies may pay you raw land royalties for any findings, such as fossils or mineral oil.

In this article, you will learn about profitable property and how to make money through real estate. Here you will find out about the basic methods and how to use them in your favor.

  1. How to make a property profitable?
  2. Real estate profitability and its relationship with location
  3. Rent profitability, how to achieve it?
  4. Long-term residential rentals
  5. Short-term rentals
  6. Things to keep in mind to make your short-term rental profitable
  7. How can Connect Property help you?

1.     How to make a property profitable?

The profit of property is not tricky at all; the best and most common way to make a profit is by increasing the property value. You can achieve this in many ways and by different means but, only by selling, this goal can take place. Therefore, you can get huge revenue in return by having an outstanding appreciation of your property.

Click here and learn how to calculate monthly rent for your property

The best way to get the right appreciation of land is by constructing on it. As cities become bigger and bigger, any land or property outside a city limits gets an immediate high appreciation. Therefore, it becomes highly valuable to developers. The value rises even further when the construction of commercial or non-commercial properties begins around your land.

Discoveries of valuable minerals or undergrounds reservoirs can add value to your property. Things like oil or archeological findings like fossils, or any other trinket can also elevate the appreciation of a property. A great example of this could be the finding of gravel deposits, which have proven to be extremely valuable in the modern era. We in Connect Property will make sure that you know everything there is to know to have a profitable property.

2.     Real estate profitability and its relation with location

Real estate profitability is deeply intertwined with location, often being the biggest factor when calculating the appreciation of an asset. Therefore, the constant development of cities and neighborhoods works in your favor.  The construction of transit routes like highways and commodities like schools and shopping malls cause the home’s value to climb up to the roof.

In addition, the location usually comes as a double-edged sword, meaning that it could benefit you or work against you. Therefore, things that are not in your control like law enforcement and city rules can be a negative factor and make your property less profitable. And it is a known fact when a neighborhood decays, so does its real state.

Learn here how to properly own and rent real estate

Home renovations or improvements have also proven to spur appreciation. By renovating a kitchen or adding another room to the property, a homeowner may definitely increase the value of a home.

Similarly, a commercial property increases its value the same way a non-commercial property does. In some cases value comes from adding parking lots, renovating a lobby area, installing an indoor pool or, simply putting a fresh coat of paint on their walls.

3.     Rent profitability, how to achieve it?

Real estate profitability comes in many forms, the most common ones are:

Raw land income

Companies may pay you royalties for any findings or regular payments for any construction that takes place in your land. These may include but are not limited to railroads, diggings, reception towers, or even heliports. Depending on your level of ownership, raw land can also be listed for renting or agricultural production.

Residential property income

A great deal of residential property revenue comes in the form of plain old rent. You will set a price for your commodities and tenants will have to comply and pay rent if they want to stay in your property. In addition, these monthly rates can be adjusted due to inflation or the high demand for properties in the area your real estate is in.

Commercial property income

Basic rent is the most common way commercial properties can generate revenue. In addition, many commercial property tenants will pay an extra amount of money to be able to choose spaces over other potential tenants. Also, they will pay an additional fee in order to keep the availability of these properties whether they use them or not.

Buy and hold

This remains one of the more traditional key ways of earning any income from real estate. There is  a vast number of ways to achieve this: buy a single-family home and list it on the market; get a multi-family home and occupy one of the units, then rent the others. Therefore you can cover your own expenses and at the same time, you´ll be managing the property by yourself and make sure that everything is in order.

Flipping

A property flipper specializes in adding modern aspects or renovations to the property in a short period of time. This in return will generate a high profit. Flipping properties can often be very profitable if you know how to find properties to renovate, you possess the necessary skills to do the renovations on your own account or supervise crew to carry them out while understanding the underlying costs and potential value in return.

Listing apps and vacation rentals

In recent years, there has been a rise in the demand for a home away from home given the fact that many tourists and travelers choose this option over a hotel. Property owners could earn income by renting a house or maybe just a room for a day or two, especially if the location of the property is on a touristic site or a popular commercial site.

Similarly, it remains unclear due to the ongoing health events when that market will return. But if it reappears, keep in mind that short renting is regulated and sometimes even prohibited in certain areas.

If there are any doubts on real state profitability or rental profitability, you can reach Connect Property to help you decide. Understanding your individual requirements is what we do; we will make sure that you always make the right choice and get the right information.

4.     Long-term residential rentals

This is the money-making option that people are usually more drawn to and is also the most common for making a profit on real estate. Keep in mind that a place to live will always be a basic human need. Therefore, buying and renting properties at the right time could be a smart business move. As always, the location of your property will be the main factor that will provide the highest value to your property.

Here you will find out everything you need to know about profitable real estate  

You may be tired of hearing it before, but the location in the real state business is everything. These characteristics don´t only act as a mark of value for a property over time, but they will also determine how fast you can rent to a long-term tenant. If you’re thinking of renting long-term, then a great location is a must. Some may say that a great location is more important than the property itself and its current state. Therefore, old and wear-down homes with great locations are one of the best real estate investments you can make as of right now.

This takes a more traditional approach if you´re interested in making money in the real estate market. Therefore, buying a property with cash to make a down payment and then holding that property for the long term is a great way to start. Depending on your credit history and economic situation, you will be able to easily hold on to that property for a very low first payment or even no down payment at all.

5.     Short-terms rentals

A short-term rental is a furnished living space available for short periods of time only, it can vary from a day to the whole weekend. Short-term listings are often vacation rentals and are usually a cheaper and more convenient alternative to a hotel.

It may come as a surprise how many people who own a second home or vacation property are generating all sorts of income by listing them and renting them out when said properties are not in use.

Similarly, short-term properties that are up for rental only are usually used by people on vacation, honeymoons, or even weekends getaways. The time guests stay might vary starting from a few nights to a number of weeks; some are even rented for as long as a 30-day period. In conclusion, anything that doesn´t go over six months is usually considered a short-term rental property.

A lot of property owners rather choose a short-term rental strategy for the potential of income that this strategy represents. In addition, marketing a short-term rental property is easier; you can use any apps, websites, or public boars to promote your space. Short-term rental comes in handy when a tenant doesn´t want to commit to any form of a long-term lease.

6.     Things to keep in mind to make your short-term rental profitable

If you’re interested in renting your property short-term and making it profitable, there are a few things to consider before you do so, like:

  • Comply with local norms and restrictions.
  • Make sure that the location your property is located allows short-term rentals.
  • Research if you need a license or a permit to rent your property.
  • Be sure to prepare for any additional tax fees.

In addition, if you want to make the most out of your property and generate a high income, here are the most frequent questions tenants have:

How long are you able to rent your property short term?

Every country, city, and town has different rules on how long a short-term should last. For the most part, in some states you are can get up to 30 days, while others allow the property owner to rent for several months and still call it short-term for tax purposes alone.

Where to find out if your city allows short-term rentals?

Nowadays, internet is pretty much the solution for everything. So, set up a quick Google search for your city and the local rental laws.

Is every property qualified to be a short-term rental?

Again, this will be determined by local laws. In some places, a single room can be up for short-term rental, while big family homes are not.

Do I have to pay taxes on a short-term rental?

Self-employment taxes include for the most part short-term rentals. Similarly, in some cities, landlords may have to pay an occupancy fee.

Do I need a realtor license?

Short-term rental regulations in most countries are set by government laws. In addition, rental is not allowed in every zone, it sometimes could be only for the tourist areas. In these cases, owners may be required to have a general business license, but not a realtor one. So, to sum up, you may only need a license for short-term rental, depending on the zone.

7.     How can Connect Property help you?

Connect Property is a platform for clients to secure, sell, and market their properties. In addition to meeting industry and customer requirements, we in Connect Property also make sure you get a satisfactory experience while we provide support around the clock. We have in store a complete set of potential listings, including the location, type of property, and any other distinctive selling characteristics.

Similarly, in Connect Property we have the ability to classify properties by a number of parameters like the range of price, exact locations, and more. We´ll also assist you to refine your search so you´ll find exactly what you are looking for.

Would you like to contact Connect Property? You can call at +971 43316688 or send an email to CONTACT@CONNECTPROPERTY.AE, and you’ll talk to one of our representatives that will gladly answer all of your questions.

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