Whether you are a full-time or a part-time real estate investor, the question is what investment strategies to go for.
As time is a major factor that determines what investment strategies to go with, you have to choose wisely. Some investment strategies require that you dedicate most of your time to them. Still, other strategies do not require more than a couple of hours a month. Therefore, here is our list of the best investment strategies when it comes to dedicating your time:
Related: What Are the Best Property Investment Strategies for Part-Time Real Estate Investors?
Best investment strategies for a part-time real estate investor
As a part-time real estate investor, you have your primary job and real estate as an extra income source. Therefore, you want to make sure to pick investment strategies that generate income without being affected by your time limit.
Buy and hold real estate
Becoming a part-time property investor is much easier when you can buy investment properties and wait for them to appreciate. This is exactly what buy and hold real estate is: basically, you buy a property and hold it for as long as you want while it’s appreciating. By the time you decide to sell it, it would have appreciated in value and generated a profit for you.
The best part about buy and hold real estate is that you can also let tenants into the property. In this way, you are making an extra monthly income until you decide to sell the property.
Fix-and-flip investment property
Fix-and-flip is another one of the best investment options for a part-time property investor. Essentially, you buy a property for a significantly low price, renovate it, and resell it for a higher price.
However, you must know that this type of investment strategies depends heavily on the time factor. It is not about the time you can dedicate, but about the time period by which you manage to sell the property. The longer you hold on to it, the more you spend on it from your own pocket.
Related: The Best Tips for Forced Appreciation in Real Estate Investing
Best investment strategies for a part-time real estate investor
There are real estate strategies that are best investment options for a full-time property investor. As we said before, some investment strategies depend on the time you can allocate for them.
Wholesaling real estate
Real estate wholesaling is a real estate investment in which time plays a major role. A wholesaler is a middleman who finds distressed investment properties, negotiates a contracting price with the seller, and goes ahead to find an end-buyer to buy the property for a price higher than the original contracting price.
This real estate investment strategy is very lucrative. However, it is highly demanding in terms of time and effort. As for the time requirements, you will have the property assigned to be sold by a specific deadline. Therefore, the whole time in between is a hassle for you to find an end-buyer. It is not as easy as you might think even with the right connections in the real estate investing business. You will have to contact maybe a hundred potential buyers, to find only 5 interested, and finally, close the deal with only one of them. As a result, you will find yourself spending long hours contacting people and marketing the investment property to be able to sell it in a short time frame.
Airbnb renting
Real estate investing is a great way to go when you want to be making money. With the variety of investment strategies that are available, you could choose what to do with your investment property. Airbnb renting is one of the best investment options when it comes to being a full-time real estate investor. Even though it is demanding time-wise, it yields a high return on investment for a property investor. For this, check out our blog on Airbnb profitability calculator in order to estimate the return on investment on your property.
The thing with Airbnb renting, though, is the number of guests coming in and out of your investment property in a short period of time. You already know that renting out your investment property on Airbnb means that the maximum renting period is a month. This means that you might have quite a lot of Airbnb guests throughout the year. This also means that you will have to spend a lot of time maintaining the property and welcoming your guests.
Related: Airbnb Rental Properties: 3 Factors That Superhosts Share in Common
Traditional renting
Traditional renting is all about buying an investment property for the sole purpose of renting it out under long-term contracts. This investment strategy is best for a full-time property investor as it takes a lot to manage. You will have to keep track of your investment property all the time. This includes collecting the rent, setting financial plans, and budgeting as well as listening to suggestions and complaints from tenants.
This real estate investment strategy is as profitable as all the other investment strategies. It guarantees a positive cash flow plus appreciation as long as you have made the right calculations. These calculations are part of estimating the return on investment an investment property is likely to generate on an annual basis. Therefore, before you buy your first rental property, make sure to use the return on investment calculator. You can find this tool on Mashvisor and use it to perform real estate market analysis as well as investment property analysis.
Finally
Even though we put it out for you in a list, it does not mean that you have to stick to it. Our suggestions are based on basic standards, especially if you are investing alone and part-time. However, if you want to be able to go with any of the investment strategies regardless of the time demand, you have two options:
First, work with a partner: Real estate partnerships are the best investment options when you do not want to be restricted to a certain strategy. Finding a business partner will make things easier by splitting tasks and responsibilities (as well as money invested). This will make it easier for you to operate with the time frame you have for your real estate investing business.
Second, hire a professional property manager: If you are a part-time property investor and don’t want to partner up, then no worries. You can still hire professional property management to take care of the daily operations of your investment properties.
For more advice on anything related to real estate investing, sign up for Mashvisor.
