Updated: Aug 10, 2020
Reasons why everyone should be investing in real estate to bolster their income.
Many are apprehensive when they think about being in the drivers seat behind the purchase, improvement and sale of a piece of real estate. Investing in real estate can have different meanings to different investors.
Through the use of different strategies, you can tailor an investment campaign to achieve any goals you may have. Education will be the key, which is why you are taking the time to read this post, right?
Following you will find a list of different strategies being used by investors today. You may even develop a strategy of your own by melding these strategies together. Please feel free to copy these strategies into your favorite search engine for more information, or look around www.tngbllc.com/blog-1 for posts. If I haven't posted a detailed entry about the strategy you are looking for, feel free to request more information.
Fix and Flip:
This is the process of finding physically distressed properties, buying them, remodeling them and then selling them for a profit. This tends to produce large return on investment if purchased for the right price. Time held is a major concern with this strategy as well. The faster the flip, the less spent on holding costs.
As with any of the strategies listed here, using this strategy can be as passive or as hands on as you choose. Their are pros who can make this process turn key, essentially making you a silent partner. You may have been born with a hammer in your hand and may want to dive into that smelly property head first. This is why real estate investing is for everyone.
Wholesaling is finding those gem type deals and buying low, then turning around and selling (after markup) to your pool of investors. This strategy requires good networking and negotiating skills. The returns on this type of strategy are decent, but shine over time. If you plan to take up wholesaling solo, you should clear time on your schedule to devote to staying informed on your market, in touch with your investors and ready to strike on that new gem just listed.
Hacking is making the property you live in an income producing property through renting space. You can do this through the purchase of a duplex, triplex or quad and moving into one of the units. You may also make room in your single family residence to rent. This strategy (along with several others) offer interesting tax advantages, along with the opportunity to learn how to lanlord. Returns are realized over time with this strategy.
BRRRR is an acronym for Buy-Remodel-Rent-Refinance-Repeat. This is a solid strategy requiring the use of the steps as prescribed. The repeat step is critical and should be realized with scaling in mind. The returns from using this strategy are consistent and can be high with the right purchases and market knowledge.
Short-Term Buy and Hold/ Rental:
Using the buy and hold strategy means buying a property for 1 to 5 years, forcing appreciation through remodeling and rental rate raises and selling to realize the appreciation. If you are looking for passive income, you can find very professional investors who can manage your properties as if they were managing their own. This is one of the strategies that any investor should consider adding to their portfolio.
Long-Term Buy and Hold/ Rental:
You should be ready to hold your property for the long haul to realize the benefits of rental income, tax shelter from depreciation expenses, amortization of loans, and price appreciation. This is another strategy that every investor should consider adding to their portfolio. If you own your residence (and don't plan to sell anytime soon) you are already practicing this strategy. What? You are already a real estate investor. That was easy, right?
REITs are just like mutual funds. This strategy is very passive, allowing you to invest your money into a trust that deals with the purchase, operation and sales of income producing properties. The risk is usually low and the returns would not keep pace with a more agressive strategy, however, having a decent fund or two in your portfolio is always advisable.
These are only a few of the many real estate investment strategies that are being used. You have read this far. It would only further to stem your curiosity to search for more information. Please post back your questions, comments and stories so we can have a constructive discussion about real estate investment strategies.
If you have any questions concerning your property, please contact Troy Larson. You can reach him by logging in and posting a comment, by email at firstname.lastname@example.org or by viewing his website at http://www.tngbllc.com .
The information presented here is the opinion, views and writings of Troy Larson. They do not represent the opinion, views or writings of any other person, entity or company.