One important way real estategenerates wealth is through regular income payments. Real estate income, commonly known as rent, can take many forms.

Revenue from raw land

Companies may pay you royalties for any discoveries or regular payments for any structures they add, depending on your land rights. Pump jacks, pipelines, gravel pits, access roads, and cell towers are examples. Land tracts with trees may be valuable for the timber that can be harvested on a regular basis, and raw land can also be rented for production, usually agricultural production.

Earnings from residential property

Basic rent accounts for the vast majority of residential property income. Your tenants pay a fixed amount per month, which rises with inflation and demand, and you deduct your expenses, claiming the remainder as rental income. A desirable location is critical to ensuring that you can easily secure tenants.

Profit from commercial real estate

Commercialproperties can generate income from the aforementioned sources, with basic rent being the most common, but they can also generate options income. Many commercial tenants will pay fees for contractual benefits such as the first right of refusal on the office next door. Tenants pay a premium to hold these options, whether or not they use them. Options income is occasionally available for raw land and even residential property, but it is uncommon.