From which two methods can real estate investments potentially earn income?

Study for the Texas SAE Real Estate Investment Exam. Master the concepts with multiple choice questions, each offers hints and explanations. Ensure you're ready for your exam!

Real estate investments can earn income primarily through rental income and resale value.

Rental income is generated when property owners lease or rent their properties to tenants. This continuous stream of income can provide investors with a reliable source of cash flow, making it an attractive method of earning from real estate. Investors typically calculate their return on investment (ROI) based on the rental income received relative to the property's costs and expenses.

Resale value refers to the profit that can be made when an investor sells the property for more than what they originally paid. Over time, real estate values can appreciate due to market conditions, location improvements, or property enhancements. This appreciation means that the resale value can potentially provide significant returns, contributing to the overall income generated from the investment.

While other methods mentioned in the choices, such as bank loans, government grants, and dividend income, may play roles in real estate investments, they are not direct income-generating methods specific to the investments themselves. Bank loans involve borrowing to finance purchases rather than earning income, grants tend to be funding for specific projects rather than ongoing income, and dividend income typically pertains to stock investments rather than real estate.

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