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TOP REAL ESTATE INVESTMENT STRATEGIES


real estate investment strategy, rental property investment strategy, landlord investment strategy


Whether you're a seasoned investor or just getting started, it's important to keep up with the latest trends and strategies in real estate. In this blog post, we'll take a look at some of the most popular investment strategies for 2022 and discuss why they might be a good fit for you. So, whether you're looking to purchase your first property or expand your portfolio, read on to learn more!


THE BUY AND HOLD REAL ESTATE STRATEGY

This is the one of the most used strategies in the world of real estate investment, both for beginners and experts in the business. What Does It Mean To Buy And Hold? The idea behind this strategy involves two aspects.

  1. Buying a property, holding onto it for many years, maintain the property while in you possession, and wait for the value of that property to increases.

  2. Rent out your property to for a profit or to offset any expenses related to holding the property.

The second option is quite favorable and much more profiting because in addition to collecting the rent, the value of your property is on a continuous rise, and you are building great wealth on a long term.

The Pros of Buy and Hold

  • With this strategy your generally not be impacted by the day to day or even year to year moves of the real estate market. For example, let’s say you buy a house this year, rent it out, and receive $200 a month in profit. Then next year the value of the house drops by 10%. You wouldn’t be in a bind. You’re receiving income during that downturn in the market. In this position and you can afford to wait for the market recover and even see the property become more valuable that what you paid for it.

  • You should also consider not just having one property but purchasing as many properties as you can using from the rental income you receive. This will allow you make money from multiple sources.

This is not difficult to learn and requires little to no experience or expertise to get started as long as you have the willingness to do the necessary research.


The Cons of Buy and Hold

  • Do not be in a haste to make the money for without patients and great commitment to the course or you might end up quitting and not making any money at all. This strategy enables you build wealth in a long run and you must with due diligence comply with its style.

  • Make careful analysis. Despite being patient and committed, you should also put into consideration the adequate research analysis on the property you want to invest in and management of the property. We will cover this in more detail in a later chapter.

  • The truth is so many beginners experience very low increase in value of their property because they are in a hurry to buy without being conscious of the housing market at the time.

THE BUY, REHAB RENT OUT, FINANCE, REPEAT (BRRRR) STRATEGY

Using this strategy, investors buy a distressed property, improve the property (via repairs and upgrades), rent it out and refinances the property to recoup some or all their initial investment. That means if you are interested in this strategy then you must do the following:


You Buy the right property at the right price

This first step is very important for an investor looking to make money or profit using this strategy, properly calculating the damages and improvements in a distressed house must be taken into consideration to buy at the right price.

It is advisable that after buying the said property, you immediately rehab and place for rent for tenants to occupy. Then place the property in your buy and hold portfolio.


Rehab The Property

Properly rehabbing a distressed property is quite important regardless of what you want to do with it. It must be in good shape before it can be flipped or rented out. If the property is not in good shape may experience the following

  • Problems with selling (flipping) the property due to issues identified during a home inspection.

  • If the property is rented out, you may experience a high number a maintenance request from your tenant.


Rent to the right Tenant

Renting to the right tenant means renting best qualified tenant. When tenants occupy a building, it is much easier to refinance such building.


Refinance

Proceed with this step after you are finished with the rehab and placed a tenant in the property. The process of refinancing a property is almost exactly the same as purchasing a property. You will still need to verify income, have the property appraised, the completion of a title search, etc. If you have picked the right property, you may receive a check at closing. You can use these funds for the next step.


Repeat

This simply means repeating steps 1 through 4 of this investment strategy.


Pros of BRRRR

  • It’s among the best strategies in real estate to build property portfolio quickly. If you can find the right house, you can use as little as 15K to build a large portfolio of properties.


Cons of BRRRR

  • It is not advisable for you if you are new to real estate investment. This Strategy involves a firm knowledge of real estate, expertise of several people, and requires an active effort from you at all times to make profit.

  • Cash, hard money loans, or high interest debt are generally used to acquire the property.

  • This strategy could put your property in foreclosure if you are unable to meet you rehab deadline, stay within your rehab budget, or are unable to refinance the original loan.


FIX AND FLIP

Looking for big cash, this is one of the strategies used in real estate to get the money quickly. The idea behind this is to purchase a real estate in poor condition and fixing up to a good condition and putting it up for sale to any real estate investor or homebuyer. This Strategy could be completed within months and have huge profit at the end.


Pros of Fix and Flip

  • If you are in a haste to get the cash quickly then this is the right strategy for you. It integrates all the aspects of real estate business such as buying a property, implementing improvements to the property, and selling the property. This enables for profit without long term commitment or waiting.


Cons of Fix and Flip

  • This strategy requires you to be on the go at all times. There is no room for passive real estate investing with fix and flip your hard work is very much needed if you want to make money.

  • To buy properties and fix them, there is need for a strong real estate network for success. A network of property buyers, sellers, appraisers, property inspectors, real estate agents, contractor’s, financiers, and others. Building reliable network can take a lot of time.

This strategy is extremely challenging for new investors without prior knowledge and experience in the real estate business and can cause them to struggle and lose a lot of money in the process.


WHOLESALING REAL ESTATE STRATEGY

This can be a tricky real estate investment strategy for both beginners and experienced property investors. Now you don’t have to buy an investment property or own one to make profit here. You do however have to find a seller of a distressed property. Have the seller sign a contract agreeing to sell you the distressed property for below market value. Then sell the contract to another real estate investor for a fee. In addition to these hurdles as a wholesaler you will need to make sure your ducks are in a row legally. It is easy to cross the line from wholesaler to acting as a real estate agent without a license.


Pros of Wholesaling Estate

  • You can make money fast within a couple of weeks if you are resourceful and hard working.

  • This strategy does not require a long-term commitment to a property. Just make sure you have a strong connection of buyers to expedite the process.

  • For first time investors, if you have little or no budget at all. Then this strategy may be good for you.


Cons of Wholesaling Estate

  • This strategy involves that you are proactively marketing the sales contract to buyers within few weeks, otherwise, you need to become the owner of such property.

  • It is risky to use this strategy because finding a buyer can be much harder than you think. If you can’t get a buyer to purchase the contract within the allotted period, there could be major consequences.

  • Even after finding a buyer, being able to convince the buyer to purchase the contract is not an easy task.

So having a good marketing plan and connecting with real estate investors who are looking to add more properties to their investment portfolios is a good and sure way to successfully progress.


CONCLUSION

If you are looking for real estate investment strategies to help grow your wealth, there are many different ways that can be executed. The key is to find the strategy that suits you best and then put in the work necessary to make it successful. You may want to look into real estate investing or flipping houses as a way of building up equity over time which could eventually provide an excellent return on investment when you sell them at higher prices later down the road. However, you may want to consider analyzing a few deals before jumping in. Sign up for a free account with InvestmentTally.com to analyze your potential deals and get access to checklist and additional information. I hope this article helps give you some ideas about how to start thinking about what's right for your needs!

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