It has been an age-old rule to invest in real estate, for it is the one thing that will always be needed—people will always need a place to live, and they’re not making any more of it. In the real estate world, there are several ways for a investor to make a good chunk of change. However, each way comes with its own set of pros and cons, which must be weighed before you come to a decision. This week, take a journey as we tell you the pros and cons about each type real estate investing strategy.
Flipping. Flipping is one of the most prominent types of real estate investments, and it is when one party buys a house for cheap, guts the interior, makes any necessary repairs, refurnishes, and then sell the house again at a higher price. Flipping may seem like the way to go for most investors, because it follows the high-risk high-reward strategy. There is a potential for a huge payout, but there will be a lot of work involved, or at least a lot of contractors hired. If you are willing to put in the work, and you don’t mind shelling out a decent amount of money in the beginning phases, then flipping may be the investment strategy for you.
Buy and Hold. This strategy applies directly to the stock market, where an investor will buy a stock, and hold onto it, no matter how much the market fluctuates. Same thing applies in real estate—an investor buys a piece of property and holds onto it, waiting for the opportune time to sell. While this strategy may take a while, the investor is almost guaranteed a large payout, so long as he has the patience and funds to hold onto the property until the right moment comes.
Rental Properties. Rental properties are by far one of the oldest real estate investment strategies in the book, but it is the go-to for many people. A rental property guarantees a set income over a period of time, but there is little chance for a huge, lump-sum payout. In addition, as an owner of a rental property, you would be held legally responsible for anything that your tenants do, and would be responsible for upkeep on the property. However, with the right location and a fair amount of patience, an investor can do very well with a rental property—slow and steady wins the race.
Investing in real estate is a sound idea, as people will always need a place to live. The method in which you choose to invest is totally up to you, but whatever you choose, we recommend to do your research before you commit to anything. Slow and steady may win the race, but if you don’t know how to run, then you have no chance at winning. Thankfully, you have a set of running coaches at your disposal; come on in and have a chat with us!