Real estate investing is one of the best investment options that you can have. There are many different ways you can make money by investing in real estate and apply different strategies. If you are a new investor, then it is very important that you take the help of the professional at David Ebrahimzadeh to help you make the right choice.
But, because of the different available opportunities, you need to ensure you select the best strategy that will fit your skills, budget, personality, goals, and needs. In order, to help you select the best path, we may have a close look at top estate investment strategies and find out the best that works for you.
Table of Contents
1. Buy the rental property
One obvious method to become a real estate investor will be buying the investment property. When we say “investment property,” that means it is residential and commercial property like the apartments for rent in Washington, which you are planning to rent to your tenants – and not fix-and-flip that we will cover later on.
Owning the rental property is the best way you can invest in real estate when building wealth & generating huge income. Even the return outcome is strong because of the equity appreciation, combination of income, and simple use of leverage while buying the real estate.
2. Wholesaling Real Estate
It is a “no money down” real estate deal; wholesaling real estate is where a lot of investors will start. Wholesaling property basically is buying the house and getting it under the contract then, rather than keeping and fixing this up, instantly selling this to the investor. It’s possible to wholesale the properties without spending any money to pay for the property. Another way is to get your house under the contract then assign this contract to a different investor who is the real buyer of your house.
The next way is to double-closing this sale. In this technique, an investor can buy the home on the same day he is going to sell this to another investor. Some companies can allow the first investor to use these proceeds from the second sale and pay to its original seller. Wholesaling will be the simple way to earn money in real estate without first using your funds however it isn’t simple. In a lot of cases, still you will need money upfront.
3. House Hacking
The House Hacking strategy means living in a home that produces income, just like in the duplex or triplex, and a house with higher rentable space like the basement, spare bedrooms, or guest house. Just by renting out various areas of the residence, you will decrease the total housing expenses. House hacking also is the best strategy as you learn landlord business when living at the rental. When you’re done living, you may move out & transition your property to the long-term rental.
4. Build New House on Spec
It is just like fixing & flipping houses in the terms of the investment dynamics, however with some obvious steps of building the house right from the scratch. Building the spec home will be the most lucrative investment plan in the markets with a limited supply of new houses to select from.
In many ways, building the spec home will actually be very less risky than fixing & flip the current house. You know what the new construction will cost — you do not have a lot of potential of running in the unexpected repairs like you will with fixing & flipping.
5. Short-Term Buy & Hold Rentals
The strategy involves buying & holding the rental properties for a short time frame– perhaps one to five years. Often this purpose of strategy is forcing the property appreciation (or add value) just by remodeling, raising its rent, decreasing the expenses, and all. The short-term buy & hold strategy works well for multi-unit apartment projects. It works really well for the rentals in the high-priced and appreciating markets that do not cash flow.
6. Real Estate Funds
Another straightforward and common method to add the real estate investments in your portfolio will be buying the shares of the mutual fund that invests in the commercial properties, and giving you the real estate exposure without any need to own, finance, or operate the properties yourself.