The Best Long Term Investment Strategies in Real Estate

In order to be successful in the real estate investing world, a real estate investor should know how to make money in real estate and what steps to follow. So the first step an investor should take is to decide what real estate investment strategies are the most suitable for his/her personality. Long term investment strategies are considered to be the more laid-back strategies. Contrary to this, investing in Airbnb rentals will require a proactive attitude from the side of the investor. In this blog, we will focus on long term investment strategies. Interested to learn how to make money in real estate with long term rentals? Keep on reading!

#1 Long Term Investment Strategies OR Short Term Investment Strategies

Both real estate investment strategies can be successful. Still, there is a difference between owning short term rentals and long term rentals. When investing in short term rentals, you are expected to have some knowledge of marketing as you will need to promote your property. Moreover, you will need to spend time in cleaning and maintaining your Airbnb rentals before new tenants arrive. There are more activities you will need to accomplish in order to start making money in real estate.

However, with long term rentals, the pace is calmer. All you need to do is to manage the property by ensuring that there are no needed repairs and it looks attractive. Moreover, you will need to find potential tenants that will live in your property for a long period of time. Let’s explore the long term investment strategies.

  • Long Term Investment Strategies: Traditional Rentals

One of the best long term investment strategies is traditional rental properties. So, how to make money in real estate with traditional rentals? Well, the first thing you should know is that long term rentals generate constant rental income. Moreover, traditional rentals are considered to be low-risk investments. The reason for this is that people are constantly searching for a new home. This creates a supply-demand relationship, which works in favor of the landlord. Moreover, in bigger cities, the demand for long term rentals is constantly growing. This is due to the fact that people nowadays tend to rent rather than buy an investment property.

Besides, if for some reason your investment generates negative cash flow, you always have a chance to sell it for a profit. Curious to find out more about long term investment strategies? Make sure to read “Here Are the Best Long-Term Real Estate Investment Strategies.”

  • Long Term Investment Strategies: Buy and Hold

One of the best long term investment strategies is buy and hold. As the name implies, a real estate investor purchases properties and turns them into traditional rentals, for instance. This way an investor is able to receive additional income to his/her primal work.

With the buy and hold strategy, real estate appreciation plays an important role. Let’s explore an example. A real estate investor buys investment properties for $100,000 each and turns them into traditional rentals. The real estate market in which the purchase was made has a strong appreciation rate of 5% yearly. Roughly calculating, the real estate investor may sell his/her properties in ten years for $150,000 per investment. Curious to learn more about the buy and hold strategy? Make sure to read “Why Is the Buy and Hold Strategy Best in Real Estate Investing?

#2 Finding the Best Real Estate Investments

Locating the best income properties is a very challenging task. Becoming one of the most successful real estate investors is not simple at all. When becoming a real estate investor, you learn how to select the best real estate investments by putting forth a lot of effort, hard work, and patience.

Long term rentals are occupied for a long period of time. Consequently, a real estate investor should focus on investment properties that are suitable to serve as long term rentals. The potential tenants are the ones who are expected to live in the income property for a long period of time. In order to attract them, it is crucial that the investment property is located in an attractive neighborhood. Let’s explore the steps a real estate investor should take in order to select the best real estate investments.

  • Comparative Market Analysis

By performing a comparative market analysis, a beginner real estate investor brings his/her career to the next level. What does that mean? Well, when you conduct a comparative market analysis, you get detailed information about the current real estate market. For example, you can check what is more dominant in the market, the supply or demand. Furthermore, you can understand if in the market there is a bigger interest in short term rentals or long term rentals. This is crucial to know when buying rental properties as the success of making money in real estate begins from choosing the best neighborhood either for traditional rentals or Airbnb rentals.

  • Investment Property Analysis

Another important research a real estate investor should conduct before investing in rental properties is investment property analysis. The results from investment property analysis can help a real estate investor in selecting investment properties that will generate positive cash flow. Another advantage of conducting investment property analysis is the fact that it presents more in-depth information about either long term rentals or Airbnb rentals. For instance, such analysis shows the potential performance of the income property on the market. A real estate investor is able to achieve this due to the calculations of various real estate metrics. Taking real estate metrics into consideration is crucial if you want to succeed in buying rental properties.

However, we understand that performing calculations and comparing the hundreds of different investment properties will take months. Therefore, the most successful real estate investors are using different real estate investing tools that help them save time and effort. One of the best real estate investing tools is Mashvisor’s investment property calculator.

  • Real Estate Investing Tools: Mashvisors Investment Property Calculator

When buying rental properties, Mashvisor’s investment property calculator can be your best friend. It is one of the best real estate investing tools for computing various real estate metrics in seconds. Moreover, it can suggest the best real estate investment strategies for a particular income property. Selecting the optimal rental strategy for investment properties is the first step of becoming one of the most successful real estate investors. Interested to learn more about the investment property calculator? Make sure to read “This Is How the Investment Property Calculator Eliminates the Need for Real Estate Market Analysis.”

To learn more about all aspects of long term investment strategies, continue reading our blog.

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