Source of Returns
The return on real estate investments comes from income or asset appreciation or a combination of both.
Income-producing real estate generates income primarily from the collection of rental or lease payments, including lease renewals. Expenses include direct and indirect management expenses, such as maintenance and improvement costs.
Income-producing real estate investment is mostly low-risk direct investment that depends on the timely receipt of lease payments.
Investors relying on capital appreciation typically expect that their longer-term property development projects are successful and the exit price will exceed the aggregate investments and any cash flow that they can generate in the meantime.
Real Estate Investment Diversification Benefits
