If you’ve never owned an investment property before but the thought has crossed your mind, there are more than a few things to consider. You will certainly learn along the way, both from your successes as well as your mistakes, and by surrounding yourself with those experienced in real estate, your path will be easier to navigate. But if you’re in the very early stages wondering about real estate investing, here are five ways you can profit from investment property.

 The first way to create wealth is by appreciation. When you invest in a rental property your lender asked for at least 20 percent down. On a $150,000 home, that’s $30,000 in immediate equity. As property values increase over time, your equity increases also. If a property goes in value by 10 percent in the first year, in this example your equity increased from $30,000 to $45,000.

When you lease out the property, your rental income should cover all housing expenses including the mortgage payment, property taxes and insurance, and homeowner association fees and maintenance and repair costs. Before you make any investment decision, be certain that your property will cash flow as all amounts above your expense is pure profit.

You can also make money on investment property by managing the real estate. A property manager collects the rent, makes maintenance calls and shows the property to prospective tenants. Investment partners can pay you to take up these tasks.

For commercial properties, you can also receive property management income but you can also make money from goods or services sold or performed there. This can mean taking a percentage of the profit from a parking garage, an onsite kitchen or even vending machines.

The fifth way to make money is to live rent-free. This means living in one of the units in a duplex, 2-4 unit or apartment building you own individually or with others. Many successful real estate investors got started buying a duplex, living in one side and renting out the other. The rental income more than covered the housing expenses plus you live “rent free.”