I claim there are only 4 ways to make money from real estate. Within the 4 ways there are variations.

1. Cash flow. You are buying places or otherwise controlling them because of the cash flow they provide. A buy and hold strategy. What they or property, where it is located, if you use debt or not and other minor variations are just twists on the same principal.

2. Appreciation. Appreciation can be closer to a magic act if you remember that for something to go up in value, the currency could be falling rather than the asset being more valuable. A house is priced in terms of a currency and the central bank is reducing the value of the currency each year.

In dependent of currency depreciation, you can have appreciation based on a shift in supply vs. demand. You also can have a shift in value because the property was changed or improved. Highest and best use is a way to uplift the value through what might be sweat equity.

3. Debt reduction. This one is a bit foreign to many BTL investors. The concept is simple when I explain it as follows. Assume you buy 10 properties and have no equity. Somehow you legally obtained 100% financing. Over a long period of time you keep the places rented and you were paying down the debt (repayment loan terms or overpayments). After some period of time, the property are all free and clear so no debt exist. Pretend the property never rose in value so you still have 10 properties worth no more than you paid for them. The key difference is you own nothing. Like having 10 savings account where the tenant makes the deposits and the landlord get to take out the cash later.

4. Tax advantages. Depending on the laws of the land and the type of property plus its use, there can be tax benefits that go to the owner. Maybe you are converting current income into capital gains. Maybe you are taking an allowance or otherwise offsetting current income.