The real estate investment business is a huge business for beginners to navigate through, as establishing a strategy to help young investors grow their real estate investment portfolio is one of the most difficult things a real estate investor can do. Understanding the nature of real estate investments and the basics of real estate investment strategies are key points to generate wealth in the real estate business. Most successful real estate investors began their journey as beginner real estate investors.
So, what are real estate investment strategies that beginners can employ to their advantage?
Our nature as humans forces us to be afraid of the unknown, but when it comes to generating revenue, craving for cash will always win over fear. As for any business, the real estate business has pillars that investors rely on to generate wealth. Here are a few real estate investment strategies that beginners can use to start making money in real estate:
The infamous buy and hold
The buy and hold strategy is one as old as the real estate investment business itself. The real estate investor buys a certain property and rents it out for rental income. The major attraction of this strategy is that the real estate investor can be buying investment properties through financing, then leasing the properties to tenants which generates a monthly rental income that covers the mortgage payments. The regular rental income is a major attraction to beginner real estate investors as the risk tends to be lower than other real estate investment strategies.
Related: An Expert’s Guide to Owning a Buy and Hold Real Estate Property
Real estate wholesaling
House wholesaling is one of the best real estate investment strategies for beginners that have a background in sales. The entire concept behind wholesaling is contracting an investment property from a seller, then finding a buyer for the property and assigning the contract to the buyer at a higher price. Wholesalers buy contracts for such properties for low and they also sell them for low at a profit. This works a lot like flipping houses except there is no maintenance involved in the process.
Real estate wholesaling is one of the short term investment strategies that beginner real estate investors can use to generate profit in a short amount of time. The only task of the wholesaler is to find a motivated seller and sign his property then find a motivated buyer and assign the contract to him/her and enjoy the fast cash.
BRRR&R
Buy, renovate, rent, refinance & repeat is one of the best real estate investment strategies for beginners. It is a model that can be copied in many cases. In a typical brrr&r scenario, the buyer will buy an investment property, renovate it to make it suitable as a rental property, rent it out to an appropriate tenant, refinance the mortgage on the property to get the initial investment out of the property, and repeat the process to create a real estate investment portfolio. This strategy is one of the real estate investment strategies that require lots of research as the experience can be vastly different from a property to another.
This model can be replicated by new real estate investors for both residential and commercial real estate.
Airbnb Investment Properties
Airbnb investment properties have become popular due to the popularity of Airbnb. Airbnb investment properties are short term vacation rentals that generate more income than traditional investment properties, but they are usually affected by the seasons and the tourism sector. Airbnb rentals are considered one of the newest real estate investment strategies that investors are investing more and more in it as time passes. Airbnb investment properties are great as an opportunity in real estate investing for beginners because they offer the stability of a rental property while using the space to the maximum limit.
Related: Owning an Airbnb Rental? Keep These Events in Mind
Airbnb offers flexibility for real estate investors and offers free marketing for the investment property. A real estate investor must conduct a thorough research in order to determine if this strategy is the best for his/her property.
How can beginner real estate investors choose the right real estate investment strategies?
Choosing between short term rental strategies and long term rental strategies can be a confusing matter to beginner real estate investors. Making sure that your property can generate a substantial income as a vacation home rental or as a traditional rental is one of the major responsibilities of the real estate investor. The most accurate method that most successful real estate investors use is to conduct an investment property analysis.
Related: What’s the Use of an Investment Property Analysis Calculator?
An investment property analysis calculator is a real estate tool that helps real estate investors analyze all aspects of the potential property. It contains predictive analytics that help predict today’s values in the future. Mashvisor’s investment property analysis calculator performs an all-inclusive analysis that includes a comparative market analysis as well.
Mashvisor’s tools can help beginner real estate investors a great deal when it comes to deciding on the best real estate investment strategies for their properties. The comparative market analysis produced by Mashvisor entails an investigation of similar properties in the area and how much they were sold for. Another tool offered by Mashvisor is the rental property calculator which offers unbiased advice for real estate investors in order to predict the rental income generated by a prospective property.
Buying an investment property and finding the right real estate investment strategies is a never-ending process. The real estate investor needs to perform a thorough research on the potential investment property to make sure it’s matched with the right investment strategy in order to be compatible with the investor’s needs and lifestyle.
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