Real Estate Strategies: 7 Of The Best for Making Money In Property
Do you want to know what the best Real Estate strategies are for making money? Lets take a dive into what you need to know before making the choice about what one to focus on.
Knowing what Real Estate strategies will suit you is going to be like any well executed event.
Strategic thinking and planning must take place before the actual event to occur. Property Investment is no different. And like any event that’s not well planned and thought through, the end result will probably suffer. Even the best Real Estate strategies with the least amount of risk will turn to mud if you don’t do some essential leg work before the actual purchase, so let’s start from the beginning.
The Best Real Estate Strategies
Start With Understanding Your Investment Goals
If you don’t know your Finance and Real Estate goals, you won’t know what the best Real Estate strategy for you will be. Why do you want to buy an investment property in the first place? Because you have heard it’s a good idea? Maybe you think it will be easy and you can set and forget the investment? How about a friend has an investment, and you want to be able to talk property together the next time you hang out? None of these are essentially great reasons in which to invest in property. Any investment comes with risks, and you should be aware of them as well as be able to navigate them when they come up. Looking at why you want to invest will essentially allow you to be guided as to which strategy may suit you the best. Not all strategies are created equal, some are higher risk than others, and some come with lots of work. Some you need lots of experience and professional input, some carry less of these components.
Determine if you want to be a passive or an active Real Estate investor
A passive investor is mostly hands off and you hire a Property Investment Company to do the leg work for your property investing. An active investor is actively involved in your investment decisions from start to outcome. If this is you, you will want to educate yourself.
What is the Purpose of Your Property Investment?
Rental income?
Long term capital growth?
Manufactured CG?
The purpose will determine what the financial side of the equation will want to look like.
Get Educated on Types of Investment Properties
Residential
Commercial
Industrial
Get educated about the pros and cons of these types or Property Classes.
Market Research
Your Real Estate strategy success will be directly related to you becoming a master of market research. Becoming a property investor isn’t about just looking at properties on the market. Start by studying the statistics of the area broadly, and then fine tuning these for the suburb, then down to the actual property itself.
Property Selection Criteria To Suit Your Real Estate Strategies
Write a list of key factors to consider when choosing an investment property. This will keep you focused, less emotional about the purchase and better able to make a good property investment decision.
Financial Preparation For Your Real Estate Strategy Success
Know your own financial situation. Assess your finances, set a budget for the purchase, and do feasibilities on your properties of interest. This will allow you to pick the investment that makes the most sense for you financially. You will need a good broker and a good accountant to give you great advice to enable you to set the best purchasing structure up for your goals.
Create a Financial Plan For Successful Real Estate Strategies
This comes hand in hand with your financial preparation and working with your professional team. Maximise your financial outcome as a first priority and lessen your tax as the second priority. Estimating costs, income and ROI will be imperative. Have a contingency fund for unexpected expenses. Plan for any life changing events in the future – like kids, retirement.
Building a Great Team Is Essential for Real Estate Strategy Success
Your team Real Estate Professionals will be essential to your success and profitability. Preferably you team of real estate agents, accountant, lawyer, property manager and brokers will want to have runs on the board as investors. Ask for referrals from previous clients and from other professionals within in the industry. Word of mouth is the best advertising.
Risk Management Of Your Real Estate Strategy
Property Investing, as with any investment, comes with its share of risks. Its what you do from the very outset of your property investment journey that lowers the risk or increases the risks. You can mitigate the risks by being prepared. Having in place things like full insurance coverage for building and tenant, diversify your portfolio, and keeping up a regular maintenance schedule can mitigate the risks.
Long-term Management and Exit Of Your Real Estate Strategies
Part of your strategic planning should be implementing a long term management program for your investment. Part of this could be getting a great Property Manager and keeping up with property maintenance. What your long term goals and exit strategy of your investment – refinance, sell, and/or pass on the property to loved ones - will be important to determine before your purchase.
Ok… so now you understand that it takes way more than just looking through Realestate.com or going out and inspecting properties to purchase. The way you prepare for your Real Estate purchase will inevitably be what makes your Real Estate Strategy a successful one or not. The Real Estate Strategy that will work the best will be based on you, your financial plan and your personal abilities, the market, the area and the demand for your product in the area.
Now lets review the actual Real Estate Strategies themselves.
Real Estate Strategy 1
Description
Purchase properties with the intention of holding them for an extended period to benefit from rental income and property appreciation.
Advantages
Steady cash flow, long-term capital appreciation, tax benefits (depreciation, mortgage interest deductions)
Considerations
Requires patience and a long-term perspective, ongoing property management, market fluctuations, did I say patience?
Highly Recommended Reading: The Book On Rental Property Investing By Brandon Turner, 7 Steps to Wealth – The Vital Difference Between Property and Real Estate by John L Fitzgerald.
Real Estate Strategy 2
Description
Buy properties that need renovation, improve and add value to them, and sell them for a profit.
Advantages
Potential for quick profits, transforming undervalued properties into desirable ones.
Considerations
Requires knowledge of the renovation process, upfront capital, risk of not selling for the desired price, market conditions, keeping to a tight budget for maximum outcome
Highly Recommend: Taking a Renovators Program Course that has a good structure and content that will cover the front end market research, feasibilities, numbers, to project management and exit strategies
Real Estate Strategy 3
Description
Buy, Renovate, Rent, Refinance, Repeat. Purchase undervalued properties, renovate them, rent them out, refinance to pull out equity, and reinvest.
Advantages
Builds a portfolio quickly, maximizes capital, combines rental income with property value appreciation.
Considerations
Requires significant capital and good credit, thorough knowledge of the market and renovation process, risk of over leveraging.
Highly Recommended Reading: Buy, Rehab, Rent, Refinance, Repeat – The Brrrr Rental Property Investment Strategy Made Simple by David M Greene
Real Estate Strategy 4
Development
Description
Purchase land or properties and develop them into higher-value assets ie. converting single-family homes to multi-family units or commercial properties.
Advantages
High potential returns, creating significant value, fulfilling market demand
Considerations
Requires extensive planning and regulatory approval, high upfront costs, longer timelines, market risk.
Highly Recommended Reading: Property Development – Discover the Secrets to becoming a Property Developer, from scratch, using none of your own money By Lloyd Girardi
Real Estate Strategy 5
Real Estate Investment Trusts - REITs
Description
Invest in publicly traded companies that own, operate, or finance income-producing real estate.
Advantages
Liquidity, lower entry cost compared to buying properties directly, diversification, professional management, less hands on for an investor.
Considerations
Less control over individual properties, market volatility, potential for lower returns compared to direct property investment
Highly Recommend: Doing research on Managed Funds that deal with Property Investment as part of their portfolio mix, reviewing yields and medium to long term ROI.
Real Estate Strategy 7
Description
Rentvesting - renting where you want to live while owning an investment property elsewhere. However, when applied to "house hacking," it can imply buying a property and renting out parts of it - such as additional units, rooms, or a granny flat - to offset mortgage costs.
Advantages
Reduces living expenses, builds equity, easier financing with “House Hacking” as it's considered owner-occupied.
Considerations
Living close to tenants, property management responsibilities, initial capital requirement.
Highly Recommend: this for the younger generation trying to get into the property market. This is a great strategy to help you afford your mortgage repayments and overheads of owning a property.
Real Estate Strategy 6
Short-Term Rentals
Description
Purchase properties to rent out on short-term rental platforms like Airbnb.
Advantages
Potential for higher rental income, flexibility in usage, tapping into the tourism market.
Considerations
Requires active management, compliance with local regulations, market competition, seasonality.
Highly Recommend: Optimize Your Airbnb – The Definitive Guide to Ranking #1 in Airbnb Search by Daniel V Rusteen. www.optimizemyairbnb.com/
Real Estate Strategy BONUS
Commercial Real Estate
Description
Invest in commercial properties such as office buildings, retail spaces, or industrial warehouses.
Advantages
Long-term leases, stable cash flow, higher rental yields
Considerations
Higher entry costs, specialized knowledge, economic factors affecting commercial real estate demand.
As you can see from the outlines above, each of these strategies has its unique advantages and considerations. These can be stand-alone strategies, or you could decide on a mix of strategies over the course of your investing journey and the journey of the property itself.Things do change over time, and you may have to adjust your sails, and pivot, but be mindful to always check in with your professional team when this may need to happen – namely your accountant, your Wealth Strategist, and more than likely your broker/bank. They can guide you in the essential aspects to consider when making critical decision about your Real Estate Investing journey.
To know what the best real estate strategy for you is, as an Investor, you should choose the strategy that aligns best with your financial goals, risk tolerance, and level of involvement you are willing to commit.
This post was all about identifying the best real estate strategies that will work for you. After you do the leg work and research upfront, you will be able to make better informed decisions to maximize the potential, and minimise the risks.
Good Luck with what ever Real Estate strategy you decide is best for you!
Eager to elevate your property investment game?
Connect with us now for a free strategy session.
Related Posts
Join Our
Newsletter
Want to stay ahead of the curve and in the know? Dive into exclusive content, insider tips, and the latest updates delivered straight to your inbox. Join our community of savvy investors who are always one step ahead. Don’t miss out – sign up now!
Disclaimer
This blog contains my opinions and doesn’t reflect the opinions of any organizations I might suggest or be affiliated with. Any information provided on my blogs is accurate and true to the best of my knowledge, but there may be omissions, errors or mistakes. The information presented in this blog is for informational purposes only and shouldn’t be seen as any kind of advice, such as legal, tax, financial, emotional or other types of advice. I don’t know you, and I don’t know your own personal or business circumstances, so please don’t rely on any information in this blog and take it as personal or professional advice for you specifically. Always seek advice from your own professionals.
This website has ever changing content and can include conversations and comments from others. I reserve the right to change how I manage or run my blog and I may change the focus or content on my blogs at any time.
Pingback: 4 Simple Ways To Finance Using Equity To Buy Another House - USUL Property
Pingback: Real Estate Investment Advice For Beginners - 5 Top Practical Tips To Get You Started - USUL Property Investment
Pingback: 3 Essential Steps to Buying Your First House in 2025 - USUL Property Investment
Pingback: Real Estate Investment Strategies: 4 Key Structures For Success - USUL Property Investment