There are many ways to make money from real estate. Figuring out which one or which financing options are best for you can be very confusing, especially if you’re just getting started. One of the benefits of using the property to achieve your objectives and desires is that you can modify it to fit your unique circumstances.
There is no “one size fits all” or “cookie cutter” method for developing a property investment strategy.
Various elements will determine the most effective property investment strategy for you. Including your financial position, attitude towards risk, goals and ambitions, time availability, knowledge and experience, credit score, and whether you want short-term or long-term gains.
You might not be aware of all the different methods available to build short-term and long-term wealth from real estate.
Here are three strategies that can come in handy when required.
- You can try this house hack if you already have a place and want to reduce your monthly costs.
Living in a house that generates income, such as a duplex, triplex, or a home with additional leasable space like a storage room, or spare bedrooms, is known as house hacking. You can cut your overall housing costs by renting out a portion of your home.
While residing in your rental, you can learn about the rental market makes house hacking an excellent strategy. And after living there for a while, you can leave and turn the house into a long-term rental.
- Well, not everyone has a place already set up for house hacking, so if you are in the market and looking to invest your money, this next hack is for you!
Buy-and-hold rentals for a limited time
This tactic entails purchasing and holding rental assets for only a short time, perhaps one to five years. This tactic is frequently used to force asset appreciation (also known as adding value) through renovations, rent increases, cost savings measures, or a combination of all three.
For multi-unit apartment turnaround projects, the short-term purchase and maintenance strategy excels. Additionally, it is effective for rentals in expensive, appreciating markets with poor cash flow.
Buy and hold homes for rent for a long time.
Owning property to maintain it for a long time is this strategy. This systematic approach has been very successful and has several advantages, including rental income, loan amortisation, tax shelter from depreciation, and price growth.
This strategy is delightful, primarily when investing in prime real estate. You’d like to keep these properties because they draw the best tenants, require minor maintenance, and typically appreciate with time.
This might sound odd, but if you want maximum property utilisation and generate significant revenue. This last hack might do the trick.
Investment in student housing which is investing in a housing complex specifically designed for students and in private homes and apartments, is known as student property investment.
If your property is close to a college, you’ll notice that you’ll have a steady stream of student tenants. Most students are very tolerant when it comes to paying rent. As the batches advance, you’ll continue to get inquiries from new students about renting a room in your apartment. This alone brings in a sizable sum of money.
Many students still opt to live away from the family home despite the coronavirus pandemic disrupting in-person tutoring.
These are a few strategies that you can take to help climb the financial mountain. Each has its advantages and disadvantages.
Remember that the majority of investors combine various strategies periodically. They all have different property investment strategy. For instance, you might start with house hacking, move on to long-term buy-and-hold rentals, and then do a few student accommodation hacks.
Don’t stress if you try one tactic and find it doesn’t work for you. An entrepreneurial endeavour is buying and selling real estate. Before you discover your sweet spot, you may need to try out things that don’t work.
Alison Lurie is a farmer of words in the field of creativity. She is an experienced independent content writer with a demonstrated history of working in the writing and editing industry. She is a multi-niche content chef who loves cooking new things.