Short term investment strategies in the realm of real estate are known as successful strategies and make for some of the best real estate investments for beginner investors who want to succeed and make money in real estate. Let us understand why short term investment strategies are a good choice and learn about the different types as well.
Short-term real estate investment strategies, as the name implies, consist of renting out properties such as a furnished apartment, a house or a condo for a short period of time as opposed to long-term real estate investment strategies.
Owners of such properties or real estate investors who aspire to invest in short term investment strategies use websites or platforms such as Airbnb to advertise their properties and rent them out for a short period of time. It also can be as easy as renting an empty room in your house on Airbnb or renting your primary residential property when you are not using it or are on a vacation.
Having a desirable location that is close to different touristic areas that have a high number of tourists all-year round make a very good environment for a successful investment in short term rental properties and is one of the fast ways to make money.
Maintaining a high occupancy rate is the number one priority for those who invest in short term investment strategies because occupancy rate indicates whether investors will get a decent rental income or not.
In short term investment strategies, occupancy rate gets its highest point during peak periods such as the New Year in places like New York City, Christmas, winter break, spring break, summer break and other important annual events.
Short Term Investment Strategies: Airbnb Rentals
It goes without saying that Airbnb becomes the most desirable short term investment strategy for real estate investors due to the fact that it is easily accessible and profitable when the investment is done properly and has gained guests’ trust worldwide.
With that in mind, competition is increasing between Airbnb hosts; therefore, you need to work extra hard to create an Airbnb listing that speaks to guests’ needs, senses, and budget. Focus on the way you present your listing on the Airbnb website and on getting as many positive reviews as possible and being a good, professional, and friendly Airbnb host.
Furthermore, make sure to keep a high level of order and maintenance in your property to attract tenants and keep having guests as well.
However, keep in mind that investing in Airbnb poses many challenges for real estate investors including Airbnb regulations, property taxes, property management, dealing with tenants, and many others. Thus, you should study all aspects of owning a property and turning it into an Airbnb listing and also your ability to be an Airbnb host.
Are you still confused between investing in Airbnb rentals vs. traditional rentals and wondering which strategy yields more profit? It is recommended to read Airbnb vs Traditional Renting: Which Rental Strategy Yields Higher Rental Income?
Short Term Investment Strategies: Fix-and-Flips
Fix-and-flips is one of the short term investment strategies that allows you to make money fast. As the term entails, fix-and-flip strategies refer to buying a property below market value and renovating and maintaining it and then reselling it at a higher price than its original one.
However, before going forward in investing in this strategy, you have to accurately estimate the repair costs beforehand and explore all available options. Make sure that the profit you will get after fixing and selling the property is enough to cover the price of the property and the repair expenses in addition to gaining profit in order to get positive cash flow.
This, however, requires knowledge of the real estate market in order to get the best deal available as well as advanced communication and negotiation skills in order to deal with buyers, sellers, and contractors.
Do you want to know in detail how to save on the fix-and-flip investment strategy? I advise you to read 5 Tricks To Save On Fix-and-Flips
Short Term Investment Strategies: Wholesaling Real Estate
Do you want to invest in short term investment strategies in order to avoid the typical 20% down payment to purchase a property for short term investment? Do you have great communication and negotiation skills but want to avoid the headache of being a landlord and dealing with different types of tenants?
Wholesaling real estate is the best choice for you. In wholesaling real estate, investors look for property owners who have set a specific price for the property and are about to sell it. The wholesaler sets a higher price for the property and looks for buyers to purchase it. The price difference between the original one and the one put by the wholesaler is the profit that the wholesaler makes.
The concept of wholesaling may seem easy and doable; however, in order to be a wholesaler, it is not enough to have negotiation and communication skills but also you have to have a great network in the real estate investment field and a deep knowledge and understanding of the housing market and the buyer and seller behaviors in it.
How to Search for Rental Properties Using Mashvisor
In order to have successful short term investment strategies, it all starts with finding the best rental properties that are available in the market. Mashvisor is an online website that provides you with a number of real estate investment services including finding a rental property.
Mashvisor does this by providing a huge number of rental properties for sale in the area and neighborhood you are interested in. It gives you detailed results based on the data information you entered and filters you used with a map that shows you the exact location of the rental property and a complete rental property analysis for each listing, from rental comps to return on investment analysis.
To start looking for and analyzing the best investment properties in your city and neighborhood of choice, click here.
Bottom Line
In general, each strategy has some advantages and disadvantages and short-term strategies are considered to be riskier with higher returns when compared to longer term strategies with some exceptions of course. Learning a number of short-term strategies is a wonderful way to be an investor in any market within the US housing market and at any time.
Are there other short term investment strategies that you think real estate investors should learn? Share with us your thoughts in the comments down below.