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What Are the Best Real Estate Investment Strategies Right Now?

 

Real estate is a very diverse investment endeavor. With so many strategies to get into real estate, it can be easy for an aspiring real estate investor to feel lost. Adding to this confusion is the fact that some real estate investment strategies become successful for certain times, while they may fail in other times. For this reason, here is a list of the best real estate investment strategies out there in the present day. There are objective facts which make certain methods the best real estate investment strategies, but there are subjective factors to consider as well. Therefore, what may be your best real estate investment strategy might not be the optimal choice for a different investor.

  • Capital Growth Strategy

Kicking off the list is capital growth strategy. In this strategy, a real estate investor purchases an investment property with the main goal of profiting from equity and appreciation. In fact, up to 70% of the profit of the property will be in equity.

While it is a passive investment, capital growth strategy can take a lot of research to get started. That is mainly because you need to find an excellent location where real estate appreciation is at its peak. This, and the fact that you may need to use your own money to pay off the property expenses, makes this strategy challenging. However, if you have a lot of money and are simply looking to invest for appreciation, capital growth strategy is your best bet.

Related: Location, Location, Location – Is Location Really All in Real Estate Investing?

  • Cash Flow Strategy

A cash flow strategy, unlike a capital growth strategy, focuses more on positive cash flow as the form of rental income. This is what most beginning investors strive for. Since cash flow is the main focus, a property’s long-term equity and appreciation may take a hit. However, as you’ll see in the next strategy, most real estate investors find a middle ground for both capital growth strategy and cash flow strategy.

  • Buy and Hold

Somewhere in between the capital growth and the cash flow strategies lies the buy and hold strategy. Because it takes the best of both worlds and is flexible in terms of long-term and short-term investments, many investors find buy and holds as the best real estate investment strategy out there.

Buy and holds earn profit through both cash flow and long term appreciation. For this reason, they require proper research before purchase as well as renovations and preparations before renting out. In terms of research, in this case you should try to find income properties that are geared toward positive cash flow and significant real estate appreciation. You can do this easily by using Mashvisor. When preparing the property for renting, be sure to have it furnished and operating smoothly.

  • Fix-and-Flips

In terms of the best real estate investment, fix-and-flips are probably your best shot at “get rich quick”. If you don’t understand the name, you will in a second. With this strategy, a real estate investor purchases rental properties, prepares and renovates them (“fixes” them), and resells them at a higher price (“flips” them).

Fix-and-flips require investors to be quick on their feet. The longer they are unable to sell a property, the more they will have to pay in mortgage payments, maintenance, and vacancies. Fixing and flipping definitely isn’t for everyone, but if you’re looking for a quick investment and are experienced in real estate, why not give it a shot?

Related: Considering a Fix and Flip? Ask Yourself These Three Questions First

  • Real Estate Wholesaling

Since the recession, wholesaling has been among the top when discussing the best real estate investment. With this short-term investment, you never actually own an income property. What happens is that an investor purchases the contract for a property for a good deal. Then, the investor sells the contract to an interested buyer. Essentially, the wholesaler acts as the middleman between the seller and the buyer.

What makes wholesale real estate so great is that it is quick, profitable, and not too risky. Since the wholesaler does not own the property, there is much less risk involved, compared to other real estate investment strategies. As an example of the low risks, a wholesaler does not have to pay mortgage, expenses, or any costs associated with the property. While this real estate strategy is lucrative and alluring to most investors, it’s best for new investors to gain experience first before entering wholesaling.

  • Commercial Real Estate

The best real estate investment for you does not have to include renting homes, as you have already seen with the previous examples. Another example of this trend is commercial real estate. In this type of real estate investing, an investor rents out to businesses looking for offices or storage spaces, not tenants looking for a house.

Generally, there is more cash flow associated with commercial real estate than with its residential counterpart. For starters, businesses generate more money than tenants, so the rent for businesses can be higher. Secondly, more expenses tend to be covered by businesses as opposed to residential tenants. The result is higher cash flow.

  • Airbnb

Last, and definitely not least in the list of the best real estate investment strategies, is to rent through Airbnb. By renting through Airbnb, in Airbnb jargon, you are a host. Your tenants are called guests. As a host, you rent out your income property to guests for a short period of time, which is usually on a nightly basis. In exchange for having people stay at your real estate property, you will receive the rental payment guaranteed, which is something traditional investors will call a pipe dream. The rent will be transferred from Airbnb directly to you.

One of Airbnb’s many, many benefits is the level of income. Most real estate investors tend to score higher rent with Airbnb than with traditional rental strategy. Also, Airbnb can be a strictly passive or active investment. With such flexibility and benefits, it’s not hard to see why Airbnb is the best real estate investment for many investors.

Interested in buying rental properties and finding the best real estate investment for you? Head over to Mashvisor for the first step to make your investment dreams a reality!

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Hamza Abdul-Samad

Hamza is a long-time writer at Mashvisor. With a focus on real estate investing tips, concepts, and top investing locations, he aims to help all aspiring investors who come across his blogs to hit the bank with their investment property.

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