Top Real Estate Strategies Investors Need to Know
Investing in real estate is a great way to build wealth over time. Every investor has their own approach and strategy.
There are many different ways to invest in real estate, and it's not a one size fits all scenario. We review several investment opportunities and what you need to know to start building a portfolio that works best for you.
Single-Family Rental
One way investors can generate cash flow while benefitting from appreciating property values is to rent out a property.
Investing in single-family homes has its appeal because they are in high demand and immediately provide income through rent.
Use the monthly positive cash flow to pay the mortgage while building equity. Make sure to have a cash reserve if you have to wait before occupying the rental.
House Hacking
House hacking is a modern concept of finding ways to generate income from your home. Typically, house hacking means buying a multi-family home, living in one unit, and renting out the others so that the tenants are paying the mortgage and the owner builds equity.
This method of building wealth requires you to be a landlord and maintain the property or hire a professional to do that part for you.
House hacking isn't limited to having tenants living in your home. You can rent out your garage or barn to those that need a place to store their boat or trailer. Look around your property and find multiple ways to generate income from your asset.
Flipping Properties
House flipping is when you buy a property, hold onto it for a short time and then sell it for a higher price. Some people also do what's called a live-in flip, precisely what it sounds like you live in the house while making updates to sell it for more money than you purchased it.
When you invest in these types of properties, upgrades, and renovations are required in order to raise the purchase price. You will likely need a licensed contractor's assistance in this investment type to ensure everything is done properly and you make the most return on investment.
Real Estate Wholesaling
Wholesale real estate is a short-term business strategy that investors can use to make a quick and steady income by conducting real estate deals without ever actually purchasing the property.
How? A wholesaler obtains a contract on a property with its seller and then sells the contract to an investor.
The goal is to look for distressed properties priced below market value where the owner isn't interested in making improvements or working with a real estate agent and is motivated to sell quickly.
Property Tax Lien Investing
Tax lien investing is where you purchase tax lien certificates. These certificates are created when local governments place liens on properties from unpaid taxes.
Surprisingly, billions of dollars of delinquent property taxes each year make this a booming business.
This type of investment is very different from the others we've discussed, so it is important that if you want to invest in these properties, you understand what you're getting yourself into.
Buy, Rehab, Rent, Refinance, Repeat
The BRRRR investment method involves buying a distressed property, flipping it, renting it, and then refinancing to pull cash out of it to invest in other rental properties.
The only difference between this investment type and just flipping or renting a property is refinancing to pull cash out to put into other rental properties.
Our first-hand knowledge of investing in real estate, understanding the importance of cash flow and ROI, and the rental and leasing market trends allow us to help you on the path to wealth. Get in touch, and we'd love to help you on your investing adventure.
Each of our Brokers and Realtors® owns investment property, so we understand the importance of creating true wealth. It also benefits the community by creating a desirable home for a deserving family.
