5 Easy Real Estate Investing Strategies

Do you know real estate investment can bring great financial rewards? Its benefits can outweigh the costs, such as investment property tax.

However, while investing could lead to a steady flow of income, it does come with risks. This is why it is essential to choose the right strategies that would open up opportunities to grow your real estate portfolio, as well as earn high returns.

So whether you are a seasoned investor or still a first-timer, you need to be familiar with many real investment strategies. Doing so will help you avoid losses and minimize potential risks. If you want to venture into real estate investment, here are some strategies to consider.

real estate investment

1.   Fix and Flip

The basic idea is to buy a house or any building, fix it and sell it for profit. While this may be easy to implement, executing a profitable flip is difficult. The investor has to pay attention to the expenses because there are so many of them. You have to deal with financing costs, carrying costs, such as taxes, utilities, and insurance, as well as the buying and the selling costs.

Moreover, finding the right house to fix and flip is even more difficult. There’s huge competition within the real estate market, but there’s no reason to get discouraged. With the help of real estate professionals, finding the right investment property may not be that difficult anymore. With them, you will learn how to look for properties that will sell in the market.

2.   Wholesaling

If you are a newbie in the real estate business, you might want to start with this strategy. Unlike the fix and flip, wholesaling does not involve initial spending. What you do is basically buy a house or an establishment and instead of fixing it, you sell it to another investor or buyer.

Even if you are low in funds, it’s still possible to apply this strategy. For one, you can get the house under a contract but then assign the contract to the real buyer.

3.   Positive Cash Flow

Investors use this strategy to generate income by renting out their properties. Although the value of the property is high and selling might be an option, the real purpose is to generate a passive income. This ensures that the rent covers the cost, such as the mortgage, property management charges, council fees, and maintenance.

For instance, your rental property brings in $30, 000 a year, and you spend $12,000 to keep the property running. At the end of the year, you generate a positive cash flow of $18,000.

This strategy works for investors who want to subsidize their lifestyle or pay for a current loan. It’s also wise to choose this investment when mortgage interest rates are low, and the rents are high.

4.   Renovate to Rent

Rather than purchasing a property to renovate and sell, you are actually buying the property to renovate and rent. Although other investors might consider this as a waste of money, making improvements to your property can reap financial rewards.

But if you really want to grow your profits, as well as your portfolio, renovating can add significant value. When your property is in good condition and well-maintained, you will likely attract buyers. Even if you don’t have plans to sell, you will increase the number of quality tenants.

The renovation also increases the rent, which in turn, increases rental income. With the right improvements to your property, you can charge a higher rent that is also in line with the market value. Given the substantial cost of property improvement, it’s crucial to choose the right improvements. The best strategy is to work on renovations that will earn you the best return on your investment.

5.   Buying and Holding Properties

This strategy is one of the most popular choices among Australian investors. There is less risk involved, and this only requires a small capital to get started. The buy and hold strategy involves purchasing a property and hanging on to it for years until you have seen enough growth in the price. By the time that the price is right to suit your financial goals, you can sell your property for a higher return.

Property investment is a known option to increase your wealth, but finding the right property and strategy is crucial to success. Although there are so many strategies available, you have to choose the one that really suits you best. Alternatively, enlisting the help of professionals to protect your investment wealth is also highly rewarding.