10 Real Estate Investing Strategies for Beginners and Pros

10 Real Estate Investing Strategies for Beginners and Pros

The average price for single-family homes in the US rose from $270,000 in 2019 to over $390,000 in 2022. For investors, it would mean more than 30% return on investment in three years' time. Besides financial benefits, investing in real estate can have numerous other advantages.

Residential and commercial property can generate rental income for investors. It's a great option for steady cash flow that you can use to offset some of your expenses. Real estate can also act as a safe cushion during economic downturns.

Including real estate in a portfolio means diversification and reduction in volatility in an investor's portfolio. Property tends to appreciate over time as the cost of living rises. Plus, rental income increases during inflation periods. It means real estate investors can maintain their purchasing power.

According to experts who write for us on finance, investors want safe assets that can maintain or increase in value even in times of instability. If you look at the European property market, property for sale in Austria is a great investment that has shown steady price growth. In 2022, Austrian houses showcased one of the best increases in price of over 13%.

In this article, you will learn more about the ten investment strategies for real estate.

How to Invest in Real Estate: 10 Strategies

In the US, individual investors own over 70% of rental properties. Here are 10 strategies you can use to get rich with investments in real estate:

  • Buy and hold. It's a strategy where investors with funds buy, hold, and then sell real estate for a higher price. To boost the value of the property, investors can update or renovate the property and rent it out during the hold period.
  • Buy and rent. If you are after rental income, this strategy is for you. It involves buying property and renting it out as soon as possible. Property investors like this strategy for having greater control over their investment, as they can choose tenants and set rental prices.
  • Fix and flip. This strategy is about buying an old or undervalued property, renovating it, and selling the property for the highest price possible. It's a high-risk strategy, but if successful, investors can generate high returns within a relatively short time.
  • It stands for Real Estate Investment Trusts. They are companies that create investment pools that enable participants to earn dividends without buying property or renting out themselves.
  • It stands for Real Estate Investment Groups. Those are the same as REITs, except investors purchase and manage property on their own.
  • It stands for Buy, Rehab, Rent, Refinance, Repeat. It's a complicated strategy that involves analyzing rental housing and rehab costs. However, it's also a good way to enrich your portfolio and generate significant equity if you have time and money at hand.
  • This strategy has a low minimum investment threshold. Using platforms like Groundfloor and CrowdStreet, investors can identify which investment projects suit their needs and invest in them. The more you invest in the investment pool of a project, the more returns you will get.
  • This strategy involves buying property at a low price and finding buyers who are willing to pay more. Owners of the property usually sign a contract with a wholesaler who will sell a property on their behalf. As a wholesaler, you won't need money to start benefiting from this strategy.
  • Private lending. It's an alternative to traditional bank money lending. Investors can lend real estate to individuals who can't obtain official permissions. Private lending can be more profitable. However, it's also a riskier venture.
  • House hacking. This strategy is for those who have and are ready to share some parts of their property with tenants. If you have a spare room, you can rent it out and earn income without investing finances.

Your starting point and your end goals are the things that matter most when choosing a real estate investment strategy.

How to Get Started with Real Estate Investing

Here is what you want to consider before diving into any property investment:

  • Set goals and expectations. Whether it's equity growth, long-term appreciation, or steady cash flow, you should set goals that align with your financial objectives.
  • Educate yourself on the market. Research and analyze local real estate markets using online platforms like Mashvisor and NeighborhoodScout to identify emerging opportunities. Consider factors like economic conditions, rental demand, and property value trends.
  • Develop a network of contacts. You can use social media like LinkedIn to connect with real estate agents, investors, and other professionals. Their industry experience and insights can help you make an informed decision about your first investment.
  • Find and analyze deals and opportunities. You can use online resources like Fundrise and RealtyMogul to start looking for property deals. Calculate potential ROI, taking into account purchase costs, potential rental income, maintenance expenses, and property appreciation.
  • Secure financing and funding sources. High interest rates or unfavorable loan terms can impact your profitability. There are several ways you can secure your financing, like getting conventional bank loans and hard money loans.
  • Make offers and closing deals. If it's a rental property, prepare it for tenants, set rental rates, and develop lease agreements. Negotiate terms and finalize the deal.

You should have an exit strategy in case of an emergency. Decide when you will sell or divest from your investment.

In Conclusion

Everyone can find a real estate investment that will work for them. By using the information from this article, you can make a well-prepared decision when it comes to choosing a property investment strategy that will work for you.

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