To every part-time real estate investor out there, here’s your guide to the best real estate investment strategies!
As the title suggests, we are addressing part-time real estate investors. Therefore, it means that, for this article, time is a key criterion for our choices. So, keep on reading to find out what strategies complement your time limitations.
Related: How to Become a Real Estate Investor: Going From Part-Time to Full-Time
Before we get to the real estate investment strategies, let’s view what makes for the best real estate investments, especially for part-timers.
Whether you are a full-time real estate investor or a part-time real estate investor, there is no excuse for you not getting the best investment properties out there. So, here is what you should be looking for:
First, look for high figures. No, we do not mean money in this case. We mean high rates of return. To check that out, you will have to go through the investment property analysis process.
Second, find a profitable location for your choice of real estate investment strategies. Location is a vital factor for success in real estate investing. For example, a perfect location for traditional rentals might not be so for Airbnb rentals. To help you determine profitable locations, make sure you conduct the real estate market analysis or what we call the comparative market analysis.
If you manage to perform these analyses, you won’t ever struggle with buying an investment property that generates profits.
Now, if you are investing in real estate part-time, here are the strategies we recommend:
Long Term Investment Strategies:
With long term investment strategies, there is plenty of room for part-time investing. Due to the extended-time nature of such strategies, it allows an investor to invest with little time on his/her schedule. So here is our take on the top investment strategies that suit part-time investing:
Traditional Rentals
This is one of the most traditional and obvious real estate investment strategies for part-time and full-time real estate investors. Buying rental properties is a great choice since you can manage them yourself if you are a full-time real estate investor. But it’s an even greater choice for part-time real estate investors since you can hire a property manager to run the business. Your only duty would be checking reports and collecting the cash flow.
Related: Why Is the Buy and Hold Strategy Best in Real Estate Investing?
Airbnb Rentals
Airbnb rentals are also convenient for part-time real estate investors. It only takes having an available space to rent out. Therefore, if you have a house or even a room that is vacant, you can list that on Airbnb for short term tenants. Thus, bear in mind that Airbnb charges both the Airbnb host and Airbnb guests a service charge. In addition to that, you can expect to pay some extra money for Airbnb property management by super hosts. Other than that, Airbnb is a great way to be investing part-time without even having to buy an investment property or staying on call 24/7.
Another convenient part of this is that you do not have to become a real estate investor at all. Many people even rent their own houses while they are out of town. This makes it an opportunity to make money part-time without becoming an investor. You can use an Airbnb calculator to find out how much your property can earn as an Airbnb rental.
Real Estate Partnerships
Working with a partner is another way to go about investing part-time. In this case, you can co-invest with a person who is willing to take the responsibilities of managing the business. A partnership would be an ideal choice if you want to spare yourself the time commitment while still making money. However, this does not mean that you do not get involved at all. You can expect to attend meetings and checking reports periodically. But, we do not think that a couple hours a month is a big deal for this type of real estate investment strategies.
Passive Income-generating Real Estate Investment Strategies
What could be better than being able to make money while you’re having some quality time with your family at home?
Passive investing is a very popular choice for people wishing to make extra money from real estate. One passive income strategy is real estate crowdfunding. This strategy is based on gathering capital from investors who do not wish to be involved. Therefore, it allows for investors to put their money in major property projects and receive an income once it starts operating.
Another strategy could be turnkey rental properties. You purchase an already rented and managed property from a real estate company. This leaves you with as little duties as acquiring ownership of the property. So, really, there is no limit to real estate investment strategies that do not require your involvement and as a result, time commitment.
Short Term Investment Strategies:
Just like the long term investment strategies, there are also short term investment strategies that are suitable for this matter. For this article, we thought that wholesaling real estate is the one we must address as one of the best real estate investment strategies for investors with little time on their schedule:
Wholesaling Real Estate Properties
Wholesaling real estate properties is a great choice for those who want to do part-time investing. Finding a distressed property and advertising it to find an end buyer is a very time efficient strategy. Unlike fix-and-flip, wholesaling properties does not involve buying an investment property. Therefore, it makes it one of the most outstanding real estate investment strategies with low-risk rates. So, why wait? Go ahead and find out all about real estate wholesaling!
Are There Real Estate Investment Strategies That a Part-time Investor Should Avoid?
Yes, indeed. There are a few real estate investment strategies that are not suitable for part-time investing. Needless to say, they are time-consuming. Some of these strategies are:
Multiple Rental Properties with DIY Property Management
If you are a part-time investor with a 9-5 career, you already do not have the time to do any extra work, let alone take care of the responsibilities and duties associated with managing a rental property. Therefore, if you are planning on owning multiple rental properties, managing them yourself is a big no-no.
As we have said previously, owning rental properties, regardless of the rental strategy, is feasible for part-time and full-time investors. But, for a part-time real estate investor, it would be so only in a case where they turn to professional property management services.
Related: 5 Tips for Buying Multiple Investment Properties
Fix-and-flip Real Estate Properties
Fix-and-flip is probably the one investment strategy that every part-time investor should avoid. Due to the delicate nature of this strategy, it requires a huge time commitment. For a real estate investor working part-time, it is hard to dedicate the time necessary to close a deal. When you fix and flip properties, you begin with searching for distressed properties, calculating if they would make financial sense to your business, and finally proceed with renovating to eventually sell them to another investor. Besides, it takes a lot of time trying to contact handymen and navigating them through what you want for the property. So, to cut it short, it is too much work that requires too much time. Unless you are planning on becoming a full-time real estate investor, we don’t think it is a wise choice.
Finally
Regardless of the time limits you have, the real estate investment strategies you choose are the ones that make a difference. Never get yourself into something that is hard for you to manage.
If you are a novice investor, make sure to check out the best real estate investment strategies for beginners as well. Subscribe to Mashvisor and be sure to check our blog for more on how to start a real estate business.