6 Top Real Estate Investment Strategies

With real estate being one of the most popular ways to put your money to work, it’s no surprise that you’re interested in getting started. Home prices typically go up over time. It’s a great way to build generational wealth. However, there are many investment strategies in the real estate world. You need to find the one that best meets your needs. Keep reading to learn six of the best investment strategies that will make you money in real estate.

 

1. Buy-and-Hold

The real estate market has a history of going up. That’s why it’s considered one of the best ways for people to grow their wealth over the years. By the time people sell their homes in the future, they’ll get more than what they paid when they first purchased their homes.

The same is true for a buy-and-home real estate strategy. Your goal is to buy homes in promising areas in hopes that the home value will go up over the years. In most cases, real estate investors will rent these homes in the meantime while they wait for real estate prices to go up.

This strategy can provide a passive form of revenue once you have a good portfolio of homes. If you hire a property management company to handle your rentals, then you can sit back and relax while your homes appreciate and generate money. Read here for expert tips on raising capital for real estate.

2. Fix and Flip

Not every real estate investor wants to hold properties long-term. They want to find a property and get them off their hands as soon as possible. For people like this, the fix-and-flip model is a great choice.

Your goal with a fix-and-flip strategy is to find homes that are undervalued and need work. In most cases, these are homes that need serious repair that the homeowner doesn’t want to invest in doing.

You’ll need these homes below market value and with a repair cost less than what you plan to sell for. You’ll need to get experience in repair estimate costs and predicting real home values if you want to find profit here.

However, if you get good at finding hidden gems, you can make good money with this model. Keep in mind, though, that this isn’t as passive as a buy-and-hold model. You’ll always need to be on the hunt for new flips.

Of course, you’ll need good capital if you want to go down this route. Working with a lender that’s a residential and commercial real estate leader will help you get the funds you need to succeed.

3. Short-Term Rentals

The long-term rental market isn’t the only way to make more passive income with the real estate market. The short-term market is bigger than ever. With websites like Airbnb allowing people to rent out their homes, people everywhere are jumping on board.

The short-term market is excellent for renting your homes to people on vacation. Your goal here is to provide an excellent experience for people who rent your home.

Take a look through sites like Airbnb to see what works best for the best performers. Your goal should be to find a property that’s similar to those. In some cases, it’s also worth buying scenic property and custom-building unique houses that give people memorable experiences that they won’t find elsewhere.

 

 

4. Wholesaling

If you don’t have much capital to get started in real estate, wholesaling is a great strategy. Instead of buying a property outright, your goal is to get homes under contract.

In most cases, you won’t actually purchase a home when you start wholesaling. You’ll take the homes you put under contract and try to sell them to other people looking to buy.

Of course, you’ll need to do a little more work upfront when you start wholesaling. You’ll need to unload your contracts quickly if you want to become successful. That’s why networking is more critical with this method than other real estate strategies.

Of course, the markups you’ll get on these sales are small. You’ll need to do good volume to make good money with this method.

5. REIT

Even though managing real estate can be very profitable, many people don’t want to put in the work. However, that doesn’t mean you can’t still gain exposure to the real estate market.

A REIT is a real estate investment trust. These investment companies will gather investments and use them to buy real estate investments. You can buy a portion of these properties by adding your money to these funds.

Once a REIT has its properties, it’s required to pay its earnings as dividends to its accredited investors. This method is a great way to gain exposure to property investment without doing the work yourself.

6. Commercial Investing

You aren’t limited to only residential real estate when you’re investing. You also have the option to invest in commercial real estate.

Of course, commercial investing works a bit differently than typical real estate investing. You’re dealing with higher-value property in this situation. You’ll need more financing and a bigger budget to get started.

Of course, that also means you see higher flips and bigger rental income. If you find the right financing or partner, you can make a better return on your investment while investing in fewer properties.

Put One of the Investment Strategies Above to Use

There’s no shortage of opportunities in the real estate market. Make sure you do your research to learn more about the investing strategies available to you. The chances are good that one will resonate with you the most, so find the one that will work best for you.

If you want to get started in real estate, it pays to know more about fixing up homes. Check out the blog to learn more about fixing up the homes you buy.