Real Estate Investing Strategies

Learn about real estate investing strategies

There are very few investments that hold up over the long term as well as real estate does, especially if you choose the right property and location. Assuming that you have done your homework and chosen that perfect place, what sort of real estate investing strategies can you use to ensure that you make money over the long haul? There are many, but for the purposes of this piece, let’s take a look at three, which are among the most common.

• Buy and hold – not really thought of as a solid investment in the true sense of the word, but one that can still make you money. The idea behind this strategy is to purchase a property in an area that you believe is going to see huge capital growth in the coming years. The idea is that you buy the property and live there yourself until the day hits when you can make a nice return on your investment by selling. While most real estate investments are geared towards generating cash flow, this method doesn’t require you to find a reliable tenant for your home, and there are still some financial rewards to be reaped in terms of tax breaks etc. Not the perfect investment scenario for everyone, yet one that is perfect for those who don’t want the risk, and also have a ton of patience.

• Buy and lease – probably the most common of all real estate investment strategies, usually because it creates a monthly cash flow, assuming you have a good property management company working for you who will keep the place rented, which in turn can be used to invest in future properties as you pay off the current ones. The benefit here is that the property can be turned into a rent-to-own deal, assuming you find a tenant who is driven to own the place. This makes them more motivated to pay on time which takes out a great deal of the renting stress that comes with owning an investment property.

• Wrap around financing – This is a great investment strategy that will put money in your pocket, whilst also removing the renting hassle. Doing this means selling the property, almost similar to the buy and lease strategy, but as your name stays on the mortgage, you can carry the loan, and thus set the percentage. The perfect scenario is if you got the property on a low interest loan, and then turn around and “sell” it at a much higher rate, which means that you will not only end up making the extra that you tacked on to the final selling price, but also a couple of hundred bucks per month over and above that, because of the loan %. Even if the buyer decides to re-finance somewhere else and buy you out, you’ll still make a great profit.

That’s really just the tip of the investment strategy iceberg, and you will easily find all manner of strategies that suit your starting budget and level of risk.