How to invest in real estate?
05th May 2022
Buying and owning real estate is an investment strategy that can be both fulfilling and profitable.
There are a few ways to invest in real estate and we’re going to list the most popular choices. Popular choices don’t mean easy choices. The world of real estate is ever-changing and evolving. Consciously watching/evaluating the market is an important part of your strategy to being able to successfully invest.
Without an obvious starting point, investing in real estate can seem quite intimidating and unachievable. But with a bit of guidance, real estate can be a reliable way to earn substantial returns both long term and short term.
One of the most popular routes people venture down when beginning to invest in real estate is buying rental properties. Renting a property works best when going in with a hands-on approach. Being available as possible to answer any problems or queries from your tenants is expected as a landlord.
A great aspect of owning a rental property is that as long as you have tenants you are guaranteed regular income every month. As the owner, you will be the one to benefit if the property appreciates over the duration of owning it.
No tenants mean no cash flow. So its important to ensure your rental property is occupied for as long as possible. It is essential you provide your tenants with a contract to make sure payment is never forgotten. Be sure to seek legal advice and assistance with this part of your investing journey.
If you understand marketing, how to profit from renovation and all property valuation, this choice is probably a no-brainer. Buying a property that you’re going to renovate is often best done at auctions. However, this doesn’t mean you wouldn’t find a steal on the regular housing market, just weigh up your most profitable avenue beforehand.
When it comes to renovating properties to sell and profit off, you typically need to have a good amount of money saved to be able to get the work done and make a profit. You want to look at reselling the property around six months after you purchased it. The longer you own it, the more your expenses increase and the more risk you take with the value of the market dropping.
You need to understand what’s in demand on the market to be able to do this successfully which is why a six-month turnaround is advised. The property market changes so quickly you don’t want to be left without profit. A great advantage to property flipping is it can offer a quick return in comparison to other avenues.
Put easily, this is like having an Airbnb. Owning a property that gets rented out for a short period of time is a short-term rental. This could be one night or two weeks. Short-term rental properties require a lot less expertise and supervision than typically rentals.
This approach means that you’re not always guaranteed a regular cash flow. Cash flow comes with the demand of your property, so although less experience is required, you do still need to meet the needs of your guests.
Do you want more help looking for rental properties or houses for sale? Please contact our friendly team or use our advanced property search online.