Buying and holding the property as a landlord and earn rental income while the value of the property goes up
Buying, rehabilitating, and reselling the property for profit.
Buying and flipping the property before closing.

The key to making good money in real estate investment is to find "undervalued property" for sale.

Sources of return on your real estate investment

You can benefit from your real estate investment as follows:

(1) Cash flow

(2) Equity growth:

Appreciation in your real estate property value
Amount of loan you pay off

Over the years, investing in real estate provides steady and increasing yields as compared to investment in stocks and metals. Learn more on real estate investments to secure your future financially.

What kind of real estate property?

You can create more value-added by buying one of the following real estate properties:

Fixer upper homes and
Distressed properties (foreclosures, bank repossessions, conversions, mismanaged properties)

Look for properties that need repair and improvement if you are a handyman or have a good contractor or handyman friend. You can also have good deals when you buy homes from the people experiencing financial difficulties. Notices of default are good sources of finding such people as we detailed in pre-foreclosures section.

Factors that have an impact on the value of your real estate investment

Overall economic conditions in the country
Rate of inflation and interest rates
Unemployment rates
Taxes on real estate and on buying and selling property
Occupancy rates in your neighborhood
Population growth
New real estate developments in the area

Creative Real Estate Online has some good advice on real estate investments.

Your real estate investment business

Remember that buying and selling real estate properties for living makes you a dealer for the IRS. You pay tax on your profits when you report your income on your tax return. You also are subject to self-employment tax if you do it by yourself. Paying self-employment tax applies to anyone who runs a business.