Choosing to invest in real estate can turn into a successful business venture yielding many financial rewards in the long term.
The big question is how to grow your business in real estate and reap financial security for many years to come?’ Many people choose to go down the traditional real estate investing path via buy and hold strategy and count on a steady flow of rental income until they decide to sell their investment property down the road. This real estate investment strategy is very long term, and if you are looking for ways to increase your cash flow and grow your real estate investment portfolio, you must think outside the box and look for creative ways to make money fast and diversify your investment portfolio in the best way possible.
Related: What Are the Top Alternative Investments in Real Estate?
How to Grow Your Business in Real Estate Investing
1. How to grow your business via fix and flips
Fix and flips investing is a short term real estate investment strategy, and, if done right, it can earn you a generous lump sum in a relatively short time frame, i.e., less than a year. Although fix and flips sound like the best plan to earn quick capital, it is harder to implement for a real estate investor who has no prior experience and/or knowledge in the matter. Finding and identifying real estate properties below market value is quite the challenge for beginner investors, and underestimating rehab repairs can cost you a lot more than you bargained for.
To be a successful real estate investor in fix and flips, you need to find the right real estate property, in a prime location, at the right price. Once you find the property, you must invest lots of money to renovate and ‘flip’ it. It will take time to fix it up before you start hunting for potential property buyers. Also, you must get the property professionally inspected to make sure that you adhere to the state’s rules and regulations.
2. Don’t discount foreclosed houses
Everybody loves a bargain! And real estate investors are no exception. Foreclosed homes are in high demand because their prices are relatively cheaper than those of real estate comps. They can be located in prime locations and sold at a discounted price below market value, which gives real estate investors more reasons to go for them. But with this said, foreclosed homes sell pretty fast and usually to the highest bidder. How to grow your business in real estate must be premeditated if you want to build wealth and financial success for the long haul.
Tips to buy foreclosed homes:
- Find a real estate agent specializing in foreclosures.
- Keep in mind that the seller will request a pre-approval letter from the bank before accepting an offer.
- Find real estate comparables in the same area.
- Remember that you buy the home as is, repair costs are all on you.
- Know that there is a small window for negotiation.
3. Leverage home equity to buy more rental properties
Borrowing money with the home equity you already have speeds the process of growing your real estate business. If you already own one rental property, you can leverage your home equity to buy more real estate properties. In this way, you don’t have to exhaust your savings funds or your own cash to buy more investment properties. And you don’t need to pay the deposit out of your own pocket; the deposit is taken from the equity of your partially owned real estate properties. It hardly needs explaining, but the more investment properties you have, the more equity you accumulate and in turn the more investment properties you can buy. How to grow your business depends on the creative mindset real estate investors must cultivate to build wealth and diversify in smarter and more cost effective methods.
4. Increase the value of your real estate property
Increasing the value of your investment property is your responsibility as a landlord and a business owner. Whether you choose to spend a little or a lot on home renovations and repair, it will all play a huge part in the final valuation of the rental property. As a landlord, you can increase both your rental income and the value of your rental property by doing minor and/or major renovations to enhance the property’s visual appeal to maximize the sale price.
How to grow your business: Ways to enhance your property’s appeal:
- Upgrade the kitchen.
- Clean cut lawn.
- Change fixtures.
- A new paint job can make all the difference; neutral colors are very appealing.
- Clean and declutter.
- Adding hardwood boosts the property’s value.
5. How to grow your business via positive cash flow properties
The trick in successful real estate investing is to find positive cash flow properties reaping long term financial rewards. These positive cash flow properties are in high demand and real estate investors are all gun for them; smart real estate investing is all about beating the crowd and outsmarting your competition. To do this, you must be fully equipped in terms of knowledge and resources.
Mashvisor helps real estate investors find positive cash flow properties in an instant. You don’t have to worry about manual calculations and conducting real estate market research, you gain quick access to detailed reports and summaries for any rental properties across the country.
Related: How to Find Positive Cash Flow Properties
6. How to grow your business via diversification
The best way to build wealth and mitigate risk in real estate investing is to diversify your real estate investment portfolio, or better yet, to distribute your wealth across different investment properties to gain financial security. Putting your eggs in one basket is the antithesis of growing your real estate business. Given the fluctuating housing market conditions, you can never be 100% sure that your rental property will reap positive cash flow return and sell for a big profit. Diversify, diversify, diversify is the best advice we can give you to grow your business in real estate investing.
7. Get educated
This point is a no brainer, but one with utmost importance nevertheless. You can not succeed in real estate investing if you do not grasp the key concepts and principles to help you make the right investment decisions and have the right forethought to grow the business with real estate investments. Whether it is formulating a long term investment plan, choosing the right real estate strategy for your business, which location to invest in, which financial means to choose, etc., long story short, you must acquire the right education and expertise to improve and build wealth in real estate investing.
8. Build up cash via short term rentals
Renting your investment property on short term rental websites like Airbnb is a great means to make quick cash and increase your capital for your business. If done right, you can rent our your investment property at a competitive price and cultivate positive reviews to grow and expand this business. Use the money from Airbnb to invest in long term rental strategies and expand the business as per your long term investment vision and plan.
How to grow your business in real estate investing is dependent on how much time and effort is invested in the business; the more time you spend on acquiring the right knowledge and experience, the better equipped you become as a real estate investor.
Related: 3 Short Term Investment Strategies Every Real Estate Investor Should Know
How to grow your business in real estate inveting is full of possibilities and unorthodox means. It is up to you, as a real estate investor to decide which real estate investment strategy is aligned with your business goals and vision.