Are you passionate about real estate, you have the necessary budget and you want to make a long-lasting, profitable investment in this field? Don’t get scared or worried about the possible risks that come along the way. If you are getting properly informed about this topic and you take the right measurements to prevent anything unexpected from happening, the outcome will be exactly the one you desire. The real estate industry can be very profitable if applying an investment strategy instead of recklessly spending money. This article is meant to sum up the signification of several real estate investment strategies that you can try at any given moment.
Fix and Flips
The first strategy you’ll want to know more about refers to fix and flips. These are short-term investments that can lead to a huge profitability if you work things right. Fix and flips involve renovating a property so that you can sell it for a bigger price. Investors who are selecting this strategy are usually in a rush and want to complete a transaction quickly. Fix and flips usually end up being deal-breakers which means they attract a lot of clients. Time is the biggest issue in fix and flips investments because both the sale itself and the renovation have to be done as quickly as possible, to avoid paying extra taxes and other monthly expenses that you would prefer avoiding.
Like Kind 1031 Exchanges
Like kind 1031 exchange – an advanced real estate strategy – involves switching properties that are not for personal use. The values of these properties should be similar. The term like kind includes a series of properties that fit the criterion. Changing an apartment building for a ranch is possible as long as the values of the properties are in the same range. There are several types of like kind exchanges and you should choose the one that fits your requirements the best. Delayed exchanges are different, in the sense that a third party holds the cash until the swap is completed.
Buy and Holds
In case you were looking for a long-term investment, buy and holds ones are the perfect options. Buy and holds are active real estate investments that ensure a positive cash flow. The only decision you have to make is whether you are going to become a landlord, or you will hire property management to take better care of having tenants. This strategy can be applied to properties of all sizes and types. Also, you create your own schedule, rules, and prices.
If you’re not good at making investments, you can ask someone else to do it for you. Working with a REIT involves combining the budget of more than one investors in order to buy large real estate properties. For instance, you can invest in a mall, skyscraper or multi-family homes and get your share of the profit at the end of the month. Hiring a financial expert to help you with this investment is recommended.