Real estate is a huge industry for investment and there are a lot of opportunities to invest in real estate. But where should you start? What types of real estate investing is best for you? Learning the basics of how to make investment in real estate is the first step in choosing a strategy. You can then explore different real estate investment strategies and pick one based on your time, budget, and long-term goals.
Different Real Estate Investment Strategies
Following are some very important investment strategies:
1) Buy and Holds
These are good long-term investments because of the steady additional income and the opportunity to gain profit. If looking for an active, long-term investment, buy-and-holds are the way to go.
Buying an investment property as a buy-and-hold requires research about the market, neighborhood, and property expenses. Positive cash-flow is very important with these investment because money is otherwise lost every month. With buy-and-holds, deciding on becoming a landlord or hiring property management is also something to consider. Can you manage the property yourself? Can you handle having tenants?
Not all buy-and-hold properties are the same. These can range from single-family homes to entire apartment buildings. Depending on location and cash flow, an investor might choose to rent out an entire single-family home to a family or rent out individual rooms to individual tenants. Multi-family homes are popular if the investor wants to have a personal residence at the same location as their investments. The advantage with multi-family homes is being able to spend less and gain more. Finally, apartment buildings can range from small to large buildings. When owning an apartment building, you are becoming the home owner association, and can create your own rules to follow.
3) Fix and Flips
Fix-and-flips are for investors looking for active, short-term investments to quickly make money. Fix-and-flips are properties that are bought, renovated, and then sold. They are not a get-rich quick scheme but if done correctly, investors can quickly profit from this strategy.
A wholesale is, perhaps, the fastest way to make some whopping profit in real estate investment. It is also the most prevalent form of real estate investing. You simply buy a house and turn it over to another investor or home owner, making a nice profit in the process. If you have a strong network of real estate agents and prospective buyers and are a glib talker to be able to close your deals seamlessly, wholesale investment is for you. You have no hassle of rehabbing the property before selling it and you can make considerable profits if you close the deal right.
5) Rehab & Flip
This is, perhaps, the best investment strategy for real estate. You buy a property at a very low price, rehab it and sell it for an amount much greater than your investment. It is much easier to get hard money loans for house flipping than regular bank loans. If you have planned your deal well, you can complete an entire project within three months. With a strong work force and a good real estate agent, you can be assured of some whopping profits.