Thanks to the rise in popularity of shows on HGTV, apps like Robinhood, and the rise of cryptocurrency, more and more regular people are looking at ways to make extra money by investing. What was once seen as a financial activity only for the wealthy or for the purpose of retiring someday, is now viewed by more regular people as a legitimate way to make money now.
Navigating the investment landscape means understanding how each potential asset will make you money. It’s about maximizing the ROI without needing to put a lot of extra time into managing the assets. There are many ways that investors make money on their assets, here are 6 of them.
Real Estate Rents
Watching shows like Reno My Rental got people excited about buying property and turning it into a beautiful rental home. Investors do make money when their rentals are full. Purchasing a home or office building and then renting it out for more money than it costs for the mortgage, maintenance, and fees, yields a profit. Sam Kooris, an investor in NYC knows all about taking buildings and turning them into rental properties. Not only that, but he also understands how to make wise investments in neighborhoods that are up and coming or need some revitalization. When people and businesses pay the rent, he makes money.
Real Estate Flips
Flipping real estate is different than buying a property to rent out. The goal is to transform the property by repairing what’s broken, upgrading to more modern finishes, and getting it ready for resale. When Samuel Kooris in Brooklyn looks at properties to buy, he must consider all the expenses before deciding to close the deal. Properties that need extensive repairs and remodeling will potentially reduce the ROI unless the repairs can dramatically improve the resale value of the property. Additionally flipping real estate as an investment strategy isn’t always the most lucrative as once the property is resold, it can no longer make the investor any more money. It’s best used as a short-term investment strategy to maximize profits.
Cryptocurrency Staking
Most people think that the big money to be made is in buying and selling cryptocurrency. And while it’s possible to earn a decent amount doing cryptocurrency trading, it’s also important to see where the real money can come from. Staking cryptocurrency means that you essentially put a portion of your cryptocurrency on hold without buying or selling it for a predetermined amount of time. This brings stability to the blockchain and helps investors earn money. The cryptocurrency holder gives the network permission to do this and in turn, they receive a commission. When you hold a lot of coins of a specific asset, this is a great investment strategy.
Capital Gains on Stocks
Another option for making money on investments is through capital gains. This is when the price of the shares goes up on a stock, the difference is the capital gain or the appreciation of the stock. Investors who make money in this way will sell the stock at a higher price and make a profit. Sometimes they will use those profits to reinvest in other stock opportunities to earn them even more money.
Dividends on Stocks
Sometimes, shareholders receive payment from the company in the form of stock dividends. Instead of paying the shareholders cash, they receive more stock instead. When it comes to tax time, unless they sell those stocks, they do not pay taxes on those dividends. It’s another way that investors earn more money through their investments.
Business Profits
Entrepreneurs may choose to invest directly into a business in a way that is different than buying stocks. When they invest in the launch or growth of a company, they get to enjoy a percentage of the company’s profits. Investment firms like Alchemy Ventures specialize in urban real estate. While they might invest in a property, sometimes they work alongside other investment firms to snatch up other great commercial real estate they couldn’t get on their own. As the businesses make money, these investment firms make a percentage of the profit depending on how much they invested in the first place. This is another way to earn money when you start investing. Finding businesses you love to be a part of is not only exciting but it can also make you money