So You Want To Profit From Real Estate, But How?

By admin, September 29, 2017

When looking at investment opportunities, real estate is always going to look like a tempting possibility. The market is starting to look up in some areas but down in some. When you invest in real estate, there are a few different ways to do just that and make your investment back. Which should you aim for and which will work best in today’s market?

Buy ‘em to flip ‘em

When thinking of investing in property, buying homes to sell them at a profit is one of the first options worth considering. It’s all about identifying properties with real potential and making use of that. For instance, you might spot a home that you can improve to sell at a much larger profit. But the best way to find properties worth selling is by building a portfolio of properties in developing areas. Look at places where new businesses and other community buildings are set to be built. Features like new commercial centers, new cafes, newly renovated homes are good signs of a growth area. However, buying, improving, and selling homes is slow. If you do it one at a time, your profits are likely to be slow coming, too.

Becoming the landlord

The number of people buying homes is on the decrease, so finding those growth spots is more important than ever. On the other hand, rentals are on the increase, so this can be the most reliable way to start making money sooner. However, as you might expect, rentals payback on investment a bit at a time. They can make a good retirement fund or income source if you have one or two and act directly as a landlord. If you start renting out more, then you have to consider the costs of letting agencies and how they impact your profits, too.

Hit the holiday crowd

When we talk about renting, we’re usually talking about long-term tenants but short-term holiday rentals are a different market entirely. If you spot a buy-to-rent opportunity in a popular location, like a winter vacation home near the Catskills, you could stand to make a lot from holiday goers. However, annual returns can go in the negative sometimes, so you have to be ready to stick with a vacation home for the long-run. In general, over a long period of time, they can always be sold for a profit. You just have to wait out the road bumps in this occasionally volatile market.

Make a business out of it

Commercial real estate is, again, an entirely different market. If you know primarily about residential properties, it can be a lot to learn. However, they tend to see annual return off the purchase price at a rate that can be 2-3 times higher than family home properties. Business owners tend to take pride in their location, as well. They’re a lot more likely to become long-term tenants, guaranteeing income through the years. They also tend to take much better care of the property on average, which means lower risk of having to make repairs.

It’s all down the environment you want to invest in and your ability to spot the right opportunity. Even in a bad market, a fantastic home, rental, or business property can stand to new you a lot of cash.