It is important for any smart real estate investor to have a strategy in place. Not doing so can cause you to make poor investment choices or find yourself in over your head. In our latest post, we will discuss different strategies real estate investors use to generate wealth and become successful with real estate.
As you develop your portfolio, is important to have a strategy in mind. What kinds of properties do you want to invest in? What do you want your profits to look like? How much time can you dedicate? Ask yourself these questions and then take a look at our strategies for real estate investors in Detroit.
Buy And Hold
Buying and holding a property is the best and easiest way to see a clear profit. You will be able to create steady income renting out the property while seeing its value appreciate over time. You will likely be able to use the rental income to pay the mortgage on the property thus having the property pay for itself. The key is to find dependable, long-term renters to occupy the home and to keep them happy while doing so. You don’t want to give them any reason to want to move out! Vacancies can quickly eat away at any profits you have seen from the property. Another perk to buying and holding is that if you one day decide you want to live in the home, it will be there for you and at least partially paid off if not paid off all the way.
Many people are cashing in on the vacation industry by using their investment properties as vacation rentals. One week of income from a vacation rental can be equivalent to a months rent if you chose to have tenants in the space. Handling the turnover between tenants can be a lot of work. Before you invest in a vacation rental, decide if you are going to hire a management company or handle it all yourself. Some people can end up making a career out of being hospitable.
Wholesaling property is a way to make money in the real estate market, without having to spend any money. It can be tough getting your foot in the door, but once you do, the profits can be substantial. A wholesaler works with a seller who has an unlisted property. They find a buyer and charge a fee for their services. It can be a percentage of the sale price or a flat fee. You will need to build a strong network and be very comfortable talking to people. Your first deals might seem difficult, but it becomes easier over time. Be sure to stay within the law, you don’t want to get in trouble for practicing real estate without a license.
Flipping can be risky, however, there can be major rewards. While the flipping trend had died down a bit, there is still a fortune to be made when one correctly. Know what you are looking for. Not every discounted property will make money on a flip. There are many things to consider such as the local market, the area, the demand and how much the property will cost you while you own it. It is important to have a plan b in mind in case the house doesn’t sell as quickly as you would want it to. Be ready to rent it out until you find a buyer should the resale take too long.