Property investment is one of the best ways to achieve financial freedom. However, if you are planning on investing in properties, then remember that there are many strategies that you can use to enjoy success. With that in mind, it is worth noting that no particular approach is the absolute way to go and that you can still realize your goals by employing all of these investment strategies. In this article, we will be looking at some of the most commonly used approaches when it comes to real estate investment.
Buy and Hold
Buy and hold is where you purchase a property and hold it for a long period either for rental purposes or for capital growth. This is one of the most common strategies since properties tend to double in price every 7-10 years. You could, therefore, buy a property hold on to it for certain period, then sell it at an appreciated price. At the same time, buy and hold offers investors a chance to enjoy a passive income over a long period of time through renting. This creates a steady stream of monthly cash flows and could also offer the owner tax benefits.
A property’s first impression is very important when trying to sell a property. Property flipping involves buying a 3CRE property that shows potential but only needs minor cosmetic repairs and improvements. Such properties will often be cheap but you will still have to cater for the cost of refurbishment. But once done, you can then sell the property for a higher price. For the right house, taking the time and making the effort to fix minor issues like paint, landscaping, walls, flooring, and such can pay off big almost immediately.
Renovating properties is another way to invest in real estate. Under this option, you simply purchase a property for the sole purpose of sprucing it up to improve its market value or rental income through renovation. This may be through minor cosmetic renovations like painting the walls or putting in a new carpet and things like that or can be as major as moving walls or extending the property. And while renovation requires a substantial investment, considering that some of the changes that need to be made are quite massive, it is one of the most profitable approaches since you increase the overall value of the property.
Negative gearing is a strategy that borrows a little from the buy and hold approach. This option works best if the rental income you receive from your property is less than the overall expenses you are paying, that means that you need to pay money (out of your wage or any other source of income) every month to keep the property going or else you’ll end up defaulting your mortgage. With negative gearing, you allow yourself to lose money for some period as your property’s value goes up. By the time it comes to selling, you should be able to make much more money than you would have before. The idea behind this is that your property will grow much faster than the cash you are putting into it or that overdue rents will increase and that your negatively-geared property will soon become a positive cash flow property this is any property that generates more rental income than the overheads you are paying, leaving some passive income that you can spend wherever or on whatever it is you wish to spend it.
As a person interested in real estate investment, consider all of the options mentioned above and see which could work for you. But as earlier mentioned, you could still take up all of these if your pocket allows it after all, it is good to diversify your options. To know more about us visit the website today!