Real estate would be a profitable investment, when the investor makes an efficient and judicious decision in their investments. Real estate investment strategies help investors to decide which strategy can work for them, under their existing situation. These strategies improve the negotiation skills of the investor and make good business decisions about investment in real estate.
Strategies for Real Estate Investment
Adopting an appropriate strategy in real estate investment is, matching the real estate problem with the right solution. There are various strategies in real estate investments, but it is likely to adopt either of the following strategy:
• Buy and Hold: It is a common strategy where the investors purchase a property and rent it, with the intension of earning the income on their investments. It is also called as rental properties.
• Flipping: It is a fast investment strategy of real estate, where the investor will not undertake the ownership. In Flipping strategy the investor will assign a contract where the property is purchased, to sell it again and gets commission for their services. For flipping a property, investor needs to be capable of two things, first need to find a good property and secondly, find a buyer in a short time.
• Lease options: Under this strategy, the investor enables the tenant to take the property on lease or rent with an option to purchase it on a future date, and value of the property is decided at the time of lease option is signed. Here buyer/tenant pays the money for acquiring the right for the later purchase. This strategy is adopted when the real estate market is slow.
• Commercial Real Estate Investment: In this strategy the value of the property is determined by the rents incurred by them. This strategy is not preferable for the new investors. Experienced investors can adopt this strategy, as an additional benefit for their investment.
• Wraps (Vendor Financing): Under Wraps strategy the investor will purchase a property and sell it under Vendor Financing. Instead of receiving the whole amount, the investor will receive regular payments under installment basis.
• New Construction: Adopting this strategy is the simple and affordable way to invest in the real estate. Here the investor starts construction of a home and sells it before it is completed. In case of good market for sellers, keeping two or more homes constantly under construction will earn some good profits.
• Renovation: Investing on the old house and getting it repaired into a good condition is the strategy of Renovation. It is adopted to earn more profits by adding the value of the property through improvements. It requires several inspections while purchasing a property, to sell after its renovation.
The above stated some strategies of real estate investments helps the investors to make good investment decisions.