Real estate investing is a fantastic way to build wealth and insure your future, but figuring out how to get started can be daunting. While stocks, bonds or mutual funds may be less time consuming, real estate investing can reward you for your time and energy with faster, larger and more secure profits.
If you’re interested in real estate investing but aren’t sure how to start, then this article is for you. By the end you’ll read about several strategies of real estate investing and have a better idea which method fits your goals. You’ll also learn about profiting through both cash flow or appreciation and which approach may be better for you.
A short-term rental is a property that people pay to rent by the night or week. A common use case for short-term rentals is vacationing families. Often short-term rentals can be rented to vacationers for a fraction of the cost of staying in a hotel. This makes them a very attractive option for those looking to save money but can still net you a fantastic profit.
People interested in short-term rentals will be looking for a combination of value and proximity, so it’s important to know the market you’re getting into and what else is available. Maintaining a well-groomed property that offers amenities like a pool and even a stocked refrigerator are great ways to be successful with short-term rentals.
If you invest intelligently in short-term rentals and find a high-quality property management company, then short-term rentals are a great way to ease into real estate investment and build cash flow.
Invest in long-term rental properties if you want a stable and reliable source of revenue from your real estate ventures. While you may not average as much profit per night from a long-term rental as you might from a short-term rental, long-term rentals are less prone to vacancy and require less management.
While a short-term rental is more dependent on proximity to hotspots and vacation destinations, for long-term rental properties you can do well in most developed neighborhoods. If you aim for locations close to schools, grocery stores and other amenities and screen your tenants well, you can turn long-term rentals into a fantastic, steady revenue stream.
A renovation strategy involves finding a property that is undervalued because it needs upgrades or repairs. Your goal is to find this kind of property, make any necessary changes, and sell it at its full potential value.
Because you’re buying a property for a subjective amount under its true value and then renovating and reselling it, you don’t have to worry about long-term goals or maintenance for any one property. This is also an attractive option because you make 100% of your profit in one transaction, as soon as you sell the property.
If you choose this option, make sure to have a network of reliable and trustworthy contractors to get any renovations you need done.
If the idea of a giant lump sum through quick appreciation instead of a steady revenue stream appeals to you then definitely consider a renovation strategy.
A turn-key property is one that has also been renovated, repaired or otherwise maintained and is ready to rent right now. Often turn-key properties are already maintained by a property management firm, as well. This makes turn-key properties one of the easiest ways to get into real estate investment.
Because it can be such a hands-off approach to investing it’s important to know what you are buying. Always make sure to inspect the property before you purchase, learn all you can about the property management company and screen the tenant that is already in place. Careful homework can make turn-key properties one of the easiest ways to build a reliable cash flow in real estate without much work from you.
Real estate investment is a great way to build wealth while planning for the future. Remember each type of real estate investment strategy has pros and cons and each will produce a different style of revenue. However, finding one that is right for you can be fun and profitable. Investing in real estate might prove to be a life-changing venture that can insure your future and provide great income streams long after you decide to quit working!
For more information about any of these strategies or to discuss crowd-funded investing, hard money loans, tax liens and more please call us directly. Remember, you don’t need a giant pool of cash to get started; just start!