When it comes to real estate investing, there is no specific roadmap to success, and you have the complete autonomy to choose from the best property investment strategies mentioned in this post to make money and reap big profits. For part-time and full-time real estate investors, it is of utmost importance to tap into the best property investment strategies in the right market for the right price. Timing is key, hence why you should always keep up with the ever changing market and economic trends.
- First and foremost, make sure you have passion for real estate investing and that you are willing to acquire the right knowledge and education to succeed as an investor.
- Second, think like a businessman: Construct a business plan with achievable goals to find the best property investment strategy aligned with your long-term business vision.
- Third, have the right financial means to buy and own real estate, i.e., having a good credit score to qualify for a mortgage loan.
- Lastly, do not underestimate the amount of time and work that will go into growing and diversifying your real estate portfolio. There is no such thing as the perfect property investment and it is up to you to find and capitalize on a good opportunity for big rewards down the line.
Top Property Investment Strategies for Part-time Real Estate Investors
A real estate career works as part time or a side business, and it is not considered a full-time around-the-clock job. However, this does not negate the fact that it requires work, preparation, and lots of learning to continue growing your returns, respective to the market and economic conditions. Without the right due diligence and real estate market analysis, investors cannot guarantee profitable returns and an overall good ROI.
Best Property Investment Strategies: Buy and Hold Real Estate
This is by far the most popular property investment strategy among real estate investors and advisors. As the name insinuates, buy and hold real estate means buying a rental property, renting it out to tenants to pay down mortgage payments, and generating cash surplus, while at the same time accumulating long-term appreciation for capital growth. Landlords make passive income, pay down their mortgage payments, and increase their equity in turn. Unlike the fix and flip model, buy and hold is a long-term real estate strategy and, essentially, ties up your capital for the long haul. Make sure to choose the right tenants for your rental property, or, else, you will not break even and lose more money than you originally anticipated. A bad tenant burns a hole in your pocket.
Best Property Investment Strategies: Positive Cash Flow
A positive cash flow property is hands down one of the best property investment strategies you can tap into right now. A positive cash flow property is essentially a very close cousin of the buy and hold real estate strategy. “Why?”, you might ask? Well, for two major reasons, you make money in two ways:
1. Rental income is passive income
2. Long-term capital growth or appreciation
For the best positive cash flow properties, Mashvisor provides real estate investors with the best analytical tools and financial metrics to decipher the best opportunities for real estate across the country in just a matter of minutes. All the data is organized and structured to help real estate investors and real estate agents make smarter decisions regarding their investments.
Mashvisor investment property calculator is a great tool to estimate the return on investment by factoring in the expenses and fixed costs. You will also gain access to key financial metrics, including cap rate, cash on cash return, occupancy rate, real estate comps, etc.
Best Property Investment Strategies: Fix and Flip Real Estate
Unlike the buy and hold strategy, flipping houses is a short-term strategy with more risks. To break it down in simple terms, fix and flip entails buying real estate at a discounted price, renovating, and fixing it in order to sell it for a bigger profit. The hard challenge here is selling the property in the quickest time possible because the longer it takes to sell, the higher the real estate investor’s expenses and carrying cost. If you are a first-time investor, we do not recommend the fix and flip real estate strategy as a first-time experiment because there is a good chance it will break the bank.
Best Property Investment Strategies: Negative Gearing
Negative gearing is also considered one of the best property investment strategies for real estate investors. As the word suggests, investors choosing this strategy will incur negative cash flow returns at the beginning, before they make a good profit down the line. Negative gearing only becomes a profitable and worthy real estate strategy when the property is sold, given property values are sky high, of course. If real estate investors opt to choose this strategy, they must have the financial stability to fund the deficit until they sell for a profit. Make sure the interest rate is locked in from the beginning, and won’t change or fluctuate down the line.
These are the best property investment strategies for part-time real estate investors. If you want to delve deeper and get into each strategy into more detail, visit Mashvisor blog for all tips and pointers on how to find positive cash flow properties and grow your real estate business. Mashvisor is your source of everything real estate: from finding the best residential real estate, through measuring return on investment, to keeping up with the best tips and tricks for real estate investors.
Comment below on which of the best property investment strategies has worked for your real estate business.