Making your way in real estate investment can be exciting and risky at the same time. You should not be worried too much as this path has been taken by thousands of people before you. And one thing many agree on is that following certain strategies and steps for your investment is the key to a long-term success. Therefore, knowing the best real estate investment strategies is a must for you as a real estate investor.
As a real estate investor, you have to be able to identify the right choices and eliminate the wrong ones. You also have to always remember that the real estate investment world is unique and different from other types of investments. It requires a good attitude, an open mind, and your willingness to take action when it is necessary. Besides that, you must always back yourself up with a good plan before starting. So, with knowing the best real estate investment strategies, you can go a long way.
Stick around and learn about the best real estate investment strategies:
Best real estate investment strategies: Fix and flip
Fix and flip is a phrase that refers to buying a property at a good price, applying some renovations, and then putting it back on the market for a higher price. These renovations could be as simple as putting new wallpaper and changing an old carpet. Even with this strategy, you can start small. You can proceed with buying an investment property for a good price and do the remodeling yourself. Though it sounds like a lot of work and time, it surely can be very rewarding.
However, one mistake that people do when buying a property for flipping is not inspecting the property well. Therefore, they end up buying an investment property that needs a load of work to be done. This, surely, is a waste of time and money. The last thing you want when buying an investment property to fix and flip is to knock down the property and build it again from scratch. This is not the goal. The property you are looking to buy in order to flip should have, at least, the basics. Good wiring and plumbing and a roof that doesn’t leak are examples of basic qualities because these features in particular require a lot of money and efforts. Therefore, make sure to examine the property carefully before investing your money into it. Sure enough, you should always consider the location as well.
Best real estate investment strategies: Buy and hold
This might be one of the oldest tricks in the book. It is simply buying a property and putting it on hold for a period of time before selling for a higher price. This strategy can guarantee great capital money, but it’s definitely not quick money as it takes years for the property to appreciate. During the time you are holding the house, you can still make money out of it. You can do that by putting it out for rent and, sure enough, the rental income increases over time. Like any other investment strategy, it has its risks. However, it is still a pretty safe investment with the rising population as the demand for housing is always going to be there.
Best real estate investment strategies: Traditional rentals
Investing in rental properties is one of the best real estate investment strategies if invested in the right property. This is everyone’s favourite because it secures a monthly steady rental income. Just keep in mind that this strategy is all about the location. Learn to do real estate market analysis. When buying an investment property, you will have to be able to get inside the head of a tenant. What would you want if you were the one looking for a house to rent?
The quality of the area and the neighborhood always plays a major role in attracting tenants. For example, look for crime rates in the area. No one would want to live in a place with high criminal activity. Another option to consider is a property close to a university, a school, or work hobs where employment opportunities are on the rise. These facilities always attract tenants, if not families, then students.
Another good deal is a location near entertainment places like parks, malls, movie theaters, etc. Moreover, access to public transportation is always a plus. Most importantly, remember that this strategy also requires you to spend money. You have to make sure you keep it in a good condition over the years and you calculate your expenses well.
Best real estate investment strategies: Airbnb rentals
This strategy is good for its high rental income over short periods of time. This is due to the type of tenants you are dealing with. When we are talking about tenants here, we mean short-term travelers who are looking for cheaper accommodation than hotels. Furthermore, you do not have to be a real estate investor to work with Airbnb rentals which is exactly why it is considered one of the best real estate investment strategies.
And just like any other real estate investment strategy, it greatly depends on the location. Airbnb prices are higher in areas with fewer hotels and hostels, so you might want to take that into account. Another advantage of Airbnb rentals is that you can name whatever price you want for your property and also determine the period of time you’d like it to be rented out. Therefore, you will not get stuck with tenants whom you do not like for a long time.
In the end, whatever strategies you choose make sure, it is what suits your goals and financial status. You can even pick a mix of strategies to go with to increase your profits, which allows you to take advantage of the variety in real estate to achieve financial freedom. After all, being patient is the key to success in the real estate investment business. As you will find, numerous opportunities are waiting for you to grab them. Just make sure you know what you are doing. Moreover, you can always turn to our professional consultants on Mashvisor for the best advice on the best real estate investment strategies.