The real estate investment market is a diverse one. Therefore, you get to choose whatstrategies you want to go with when beginning investing in real estate. Whether you want to do long-term investments or short-term it is all up to you. However, in this article, we are going to discuss the best long-term real estate investment strategies.
Long-term property investments are popular in the real estate investment business. Considering the money real estate investors make in the long term, there are a few strategies that are lucrative. So, here are three of the most lucrative long-term real estate investment strategies.
Related: Why Real Estate Is Among the Best Long-Term Investments in the US at the Moment?
Long-term real estate investment strategies: Traditional rentals
When considering investing in long-term real estate strategies, traditional rentals is the first strategy to come to mind. It is basically buying a rental property and renting it out for long periods of time. Here are some advantages of traditional rentals in the real estate investing market:
Education:
Investing in traditional rentals does not require much in terms of real estate education. You do not have to have a degree in a related major. You can start investing part time and have your own career at the same time. However, that does not mean that you should not educate yourself on, at least, the basics of real estate investing. You must understand the terminology associated and a few rules that are essential in the real estate market. You should also learn how to do real estate market analysis.
Tax benefits:
Traditional rental properties are eligible for many tax benefits. Tax deductions are applicable in this case. Therefore, real estate investors get to benefit and make up for any losses they experience in their long-term property investments.
More financing options:
If you choose to invest in traditional rental properties, it will be easier for you to get financing. There are plenty of programs that support real estate investors and easier options, especially, for long-term property investments. You can choose whether to get a bank loan, apply for an owner-occupied loan, or even try out owner financing.
Fewer efforts:
Investing in traditional rentals requires fewer efforts. That is, especially, if you are planning on hiring professional property management service. When having such a company taking care of your business, you have got no worries. On the other side, some people do not like to deal with rentals. Most often the reason is having to deal with tenants and various legal issues. The thing is, when you invest in traditional rentals, you do not really have to deal with your tenants much. You meet your potential tenants, sign the lease agreement, and that’s where your duties end. You can have your professional property management company take care of the rest on your behalf. The only occasion you will have to be there is when a situation arises that requires your presence.
Related: Investment Rentals Are the Best Way to Make Money. Here Is Why
Long-term real estate investment strategies: Airbnb rentals
Airbnb rentals are one of the best long-term real estate investment strategies. They are very common in the investment property market nowadays. Though Airbnb rentals are very similar to the hotel concept, they are also different in many ways and are more independent. Let us break down the advantages of Airbnb long-term property investment:
People and experience:
For those who do not like routine, the Airbnb rentals strategy is the best option to go with. Besides making money, you get to meet a lot of people from all different backgrounds. Your guests might be vacationers or even business people on a short business trip. The one thing they have in common though is that they are looking for a cheap accommodation. That is in addition to a new kind of experience. You can invest in Airbnb rentals without being a professional real estate investor.
Little financing needed:
The good thing about Airbnb rentals is financing. You do not have to get a loan in order to purchase a property for the sole reason of renting it through Airbnb. You can list an extra room in your own house and make money out of it. Of course, you will have to spend some money on improvements, but it isn’t as bad as taking a loan with which you’ll be stuck for a long time.
Another advantage in terms of financing is property management. With Airbnb rentals, you get to save money on professional property management unless you have multiple properties.
More money:
Another advantage of Airbnb rentals is the money you make. This is one of the long-term real estate investment strategies through which you can make a lot of money. It can also help you pay for your own property loan if you have one.
Prices:
The great thing about this strategy is that you, as the owner, set your own prices. You can start with a low price, and then as you build a good reputation, you can raise your prices gradually. There are no regulations that prevent you from doing so.
Related: Real Estate Investing: Traditional vs. Airbnb Investments
Long-term real estate investment strategies: Buy and hold real estate
Yet another one of the best long-term real estate investment strategies is buy and hold real estate. Many real estate investors prefer to go with this investment strategy for its advantages. So, we can sum up the advantages of buy and hold real estate as the following:
Appreciation:
The main purpose of buy and hold real estate is appreciation. Basically, you buy the property and hold on to it for a long time while it’s going up in value. This is indeed one of the best long-term real estate investment strategies as it serves you in the long run.
Stable income:
When you buy a property and hold on to it while it’s appreciating, you can still make money. You can buy residential real estate properties and rent them out. This provides you with a stable income during that period.
Tax deductions:
Buy and hold real estate investment properties are also subject to tax benefits. You can apply for tax deductions that will result in better cash flow for you.
Growing business:
Investing in buy and hold real estate helps real estate investors grow their business faster. It helps them grow their real estate investment portfolio.
Last thoughts
Long-term real estate investment strategies are the best choice for those who are looking to make money in real estate. They come with great benefits and are more comfortable to deal with. The thing that you have to keep in mind is buying the right property. This comes through taking into consideration the location, the economy, the tenants pool, and other factors. For you to explore the best properties in the best locations, you can always turn to Mashvisor.