6 Most Profitable Real Estate Investment Strategies

Dated: July 15 2020

Views: 5

living room

Like every other top business out there, real estate investment comes with a list of strategies investors can choose from. This article will highlight these investment strategies and how they work.

1. Buy and Holds

One key advantage of Buy and Hold is that it offers consistent extra income as an investment method. Likewise, it increases the chances of the property appreciating over time. Start with research – know more about the property expenses, the neighborhood, and how the market works there. You aim to ensure that the property will guarantee a positive cash-flow consistently. If you are fine with managing a property or functioning as a landlord, you may buy a Buy and Hold property and rent out. For residential apartments, you can rent to only one family or rent different segments to different people. The latter is more suitable if you want to stay in the same property. Either way, be ready to join the homeowner association as a landlord and design property use guidelines for your tenants.

2. Airbnb Investment Properties

Despite being a buy and hold property, the Airbnb property is more suitable for short-term or vacation rentals. Before you settle for this type of investment, do a quick background check of the occupancy rates in your area and the legal regulations associated with Airbnb or short-term rental properties. As the owner or landlord, you must be ready to manage turnover between tenants effectively. Although it appears demanding, owning and managing Airbnb investment properties is highly rewarding revenue-wise. Just get a property in the best real estate area, and you are good to go.

3. Fix and Flips

As the name suggests, this basically involves buying a home, revamping or renovating it, and then reselling it. It is a short-term real estate investment suitable for people who want fast cash. That said, there are a couple of deal breakers to observe in fix and flips. First, ensure that you know the issues a property is facing. Feel free to bring in experts like appraiser, contractor, and inspector to help in assessing the properties and ensure that you get the best deal possible.

4. Commercial Real Estate

Commercial Real Estate investment is another lucrative investment strategy out there, thanks to the vast U.S. commercial market. Your target customers are businesses – both small and large scales. Despite its potential to offer huge returns on investment, commercial properties tend to have more extended vacancies. So, it may not be the best option if you are just starting out as a real estate investor.

5. Passive Investments

If you are investing passively in real estate, it means trusting someone else with your money and investments. You can register with a reliable Real Estate Investment Trust (REIT) – an arrangement where a group of investors comes together to combine resources and jointly invest in massive real estate property. In this case, properties of interest include malls, several units of single-family homes, or even skyscrapers. The profits are made jointly and shared among investors, who, most times, have little or nothing to do. The returns are significantly higher, and the risk minimal. There are various kinds of REITs – mortgage, office, healthcare, residential, or retail REITs. You can decide to put your money into a stock-exchange listed REIT. Alternatively, you can buy a share in a REIT mutual fund. While both options are great, reach out to a financial expert for professional guidance. You can also invest passively in real estate by lending your money to fix and flip investor. Such an investor will prefer your loan offer to the bank’s because the banks hardly offer loans for vacant properties that need renovations. The investor will foot the 20% down payment and closing costs. Your gain as the lender is the interest payments on the loan, as well as the final amount payable at the end of the term. The property is the collateral in this case.

6. Real Estate Wholesaling

Ever thought of a real estate investment option that does not require you to spend at all? Well, they exist in different forms. With real estate wholesaling, you can make some money without any leaving your purse. As a wholesaler, your role is to look for property sellers that have not listed their properties, then find buyers for such properties. You get a share of the selling price if the deal is successful, which is your gain. Your chances of succeeding in this type of real estate investment depend on your networking abilities. You need to make contacts with as many buyers and sellers as possible to get more commissions.

Finally, we are confident that you will find the right investment strategy from the list above that suits your needs and preferences.

Latest Blog Posts

Finding An Inexpensive MDU For Sale: 7 Proven Methods

Any residence with two or more units in the same building is referred to as a multi-family property or multi-dwelling unit (MDU). This kind of home comes in various structures, including the,

Read More

Cash-On-Cash Return: How To Calculate The Metric For Any Rental Property

Cash-On-Cash return analysis is crucial data for evaluating the rental property and finding out its return on investment (ROI). This data is most important to real estate investors who wish to fund

Read More

How To Find The Most Profitable Long-Term Rentals

Basically, long-term real estate investment involves purchasing a property only to rent it out to tenants for a long time. Since real estate investors do hold the property for a long period (at

Read More

5 Points to Consider Before Purchasing an Apartment

Some guidelines are attached to investing in apartments to achieve a positive outcome in the long run. You may end up with a bad investment by rushing into purchasing an apartment without

Read More