Investment Property Strategies

Investment Property Strategies

 

Which Strategy is the Right One for You?

If you want to make your way into real estate investment, it’s important to note that it can be both a risky and exciting endeavor. One thing that many people in this business turn to is different investment strategies to help create success for themselves in the long run. All strategies require an open mind, a positive attitude, and a will to succeed. Check out these strategies that are among the best in the business!

Buy and Hold

This long-term investment is great because of steady income going into your pocket each month, as well as the opportunity to gain appreciation. To buy one of these, you will need to do plenty of research about the market, as well as the neighborhood and property expenses. If there is no positive cash-flow, money could be lost every month. With this investment strategy, becoming a landlord or hiring a property management team is another thing to think about. It’s also important to note that not all buy-and-holds are the same. Some can be single-family homes, while others can be an entire apartment complex. However, multi-family homes are great for having a personal residence at the same place as your investment, as well as spending less money in order to gain more. If you’re owning an apartment building, you are becoming a sort of HOA, so you can create your own rules for tenants to follow. Buying the property and holding it for a while to get a higher price will take some time. Be patient, and you will eventually see the benefits of this strategy come pouring into your bank account!

Fix and Flip

This simply means to buy a house or other property for a decent price, making renovations, and putting it back on the market for a higher price than the one you paid. Renovations can be as simple as putting down new carpet or changing the wallpaper to something more drastic if the home is an older model. Click here to read our blog filled with tips and tricks for renovating an older home! One of the greatest things about this strategy is that you can start small and do the remodeling yourself (or you can get a small team to help you). Make sure you inspect the property thoroughly before investing in it, as well as considering the location. If none of these are up to par, you may end up losing money rather than gaining it. This strategy will take time, but if done right can be truly rewarding.

Renting

Owning a traditional rental property is one of the best strategies on this list. There is a steady monthly income, and it can be done with either you as the landlord or having your own property management team. One thing that you need to keep in mind is that the strategy is all about location. Do a real estate market analysis and research on the area you’re looking into. Think of yourself as a tenant, and ask yourself if you would want to be in the place you’re interested in. Look at the neighborhood, crime rates, and anything else that plays a major role in a tenant’s decision-making. If you have any doubts about a property, don’t invest in it. Once you find the right property, you will be rewarded with extra monthly income that you can put towards your mortgage (or other expenses).

Airbnb Investment Properties

These are almost like the buy-and-hold properties. However, instead of single-family or apartment complexes, they consist of vacation homes and short-term rentals. These investments have been known to make much more money than the traditional buy-and-hold strategy. Tenants who stay here are usually travelers who are looking for a cheaper route than getting a hotel suite. You also don’t have to be a real estate investor in order to work with one of these rentals! You can also name whatever price you want for the Airbnb property, as well as how long you want it to be rented out. This way, you don’t get stuck with any tenants for long periods of time. If you invest in this sort of property, focus on location, types of tenants, and determining the rates in the area.

Passive Investments

If you don’t want to get your hands dirty in the real estate business, you can easily give your money to someone else to start the investment process for you. One way to make this happen is by working with a REIT (real estate investment trust), a group that will pool their money together to buy large investments, such as skyscrapers, malls, single-family homes, etc. Each investor gets a share of the profits, but these passive investments tend to have higher income returns and less risk. You could also give your money to an investor in order to flip a property. Since it is difficult to get a loan from the bank for a house that needs a little touch-up, lending your money helps them flip the house and give you interest payments on the loan with a final payment at the end of the term. In the end, even though you lent money to an investor, you will make your money back, plus a little extra!

As you can see, there are a number of ways to invest in a property! Whichever strategy you choose to go with, make sure it has the following qualifications: good location, research to back up your rates, goes along with your goals and financial status, and get help if needed. All of these strategies also require a lot of patience and a positive attitude. You can even do a mixture of different strategies to increase your monthly income. There are plenty of opportunities just waiting for the right person to come along and take it. That right person could be you! 

Want to learn more about the current real estate market in the Treasure Valley? Click here!

 

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