Investing in real estate isn’t hard, even if you are a beginner. At least it isn’t if you have some idea on how to invest in real estate and use the best cashback calculator. Then, you are sure to get an ROI on your investment.
Of course, it helps you have other entrepreneurial skills to supplement your investment strategies. However, you can still earn and turn a profit even as a total beginner.
It all ties back to your ability to spot a valuable real estate opportunity. Keep reading to find out how to make the most out of your real estate investment!
Real Estate 101
When people think of real estate, they think about a plot of land with a house on it or a condominium. However, owning a piece of property doesn’t automatically mean you profit from it. Instead, you have to know how to use real estate to make money.
For a startup and an individual investor alike, knowing how to invest is what matters the most. Study real estate investing strategies as closely as possible and research the history and market data. Then, give one of the following strategies a try.
Wholesaling includes finding a property, securing the contract for the buyer, and upselling the property. As an investment strategy, wholesaling may be challenging for a startup to pull off.
Ideally, you would build a network at a local housing market. Then, work on scouting new and exciting properties while actively listening to the needs of people on the market. Once a property is on the market, go and secure the contract for that property.
Contact the buyer and sell them the contract for the real estate. You make the difference, and that’s how you make money wholesaling. It’s a strategy that requires both network and money, making it a complex endeavor for a newcomer.
2. House Flipping
House flipping is a beginner-friendly investment strategy, and it works best if you have a housing business. For example, it’s a perfect opportunity if you have a home renovation business and want to upgrade it to a real estate business.
Here, you find properties that need fixing, renovate them, and sell for more money. Working out the profit is easy since all you have to do is redo the property and sell it. That reduces the challenge of market research and the need for a complex network of associates.
Suppose you don’t know how to fix properties, partner up with a home renovation business. Then, work on finding properties. Out of all strategies, this one is the best for new investors.
3. Buy and Hold
Buy and hold strategy is an investment strategy that serves a conservative investor. If your goal is to protect your investment, buy the property and rent it out to tenants. With this strategy, risks and work are minimal.
For buy and hold work, research the market and find a property you can get on a fair deal. Buy the real estate, rent it out and net the rental money from the tenant.
Be aware that this strategy nets the lowest ROI. But, if you want to get into real estate and don’t know-how, go with buy and hold. It’ll get better when you get more experience and try working with real estate.
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4. Short Term Rentals
Short-term rentals are pretty famous and profitable for real estate investments. The general idea is to get a multi-unit property or a luxury apartment and rent it out on Airbnb.
Startups should jump on opportunities to try short-term rentals. If you have a team of people, you can work as property managers on several properties at once. If you lease the property and get a signed deal to use it as an Airbnb rental, you can be a property manager!
So, a team of people can cover multiple rentals at once and then even look to purchase their properties. From there, the profits increase, making this probably the most profitable opportunity on the list.
5. Real Estate Syndication
Finally, real estate syndication is an investment strategy perfect for savvy startups. Syndication is the most complex and challenging to pull off out of all systems. However, it’s a strategy that brings fast ROI and helps you get more real estate faster.
Real estate syndication is when parties collect capital, buy the property, and split the profits. It’s a strategy that makes expensive properties easier to buy. So, a team can delegate tasks to find the financing, scout the real estate, buy it and sell it. It’s a task that takes the whole team, making it perfect for a startup.
However, it takes a team of skilled individuals to pull it off. It’s perfect for a startup with a focus on fast growth. Yet, it’s not a beginner-friendly strategy. Still, give it a try if you have a skilled team.
Invest in Real Estate
Investing in real estate is all about proper preparation and planning. Yet, you have to do more than follow a blueprint to make any investment profitable.
Start small and build from that point. Managing a single property for a year can teach you more than any mentor if you are willing to learn.