Top Three Property Investment Strategies

6

Image source: Flickr

Investing in real estate means a lot more than finding a comfortable home for you and your family. Over the past few years, buying and selling real estate has become a popular platform for investment. Like with any kind of investment, there’s a risk of loss, but an incredible amount of potential for gains. Here are some of the simple methods for you to get into property investment.

Perhaps the easiest method of property investment is buying a basic rental property. This is probably one of the safest strategies you can use, simply because of how old and well-researched it is. You simply buy a property, and begin renting it out to tenants. You’ll be responsible for paying taxes, the mortgage, and any costs which are involved in the property’s upkeep. In an ideal situation, you’ll be charging enough rent to cover all of these costs. You might want to bump the rent up in order to turn a better profit. Be wary though, overpricing your property could lead to disaster. There are many websites to determine real estate value which you can use. Once the mortgage is paid off, the standard rent will be almost entirely profit.

7

Image sourcve: Wikimedia

Next, we have what’s known as real estate trading. This area of property investment is a lot more volatile than your standard rental property. I strongly recommend building some experience using easier methods. This is an extremely fast-paced side of investment. If you were to equate this to a stock investment strategy, it would have to be day trading. Real estate traders buy properties intending to hold them for a short period of time; usually under four months. After this, they’ll put it up to sell at the right time, and aim to turn a profit. You may have heard this technique being called “flipping” before. While this is by no means a beginner’s tactic, it’s certainly not impossible. Most of the time, trading is centred on buying properties which are in an active market, or significantly undervalued.

You may also be interested in what some people call “leverage trading”. The name is drawn from the one advantage property traders have over stock traders. If you want to buy a stock, for instance, you’ll always have to pay the going rate. Even if you’re buying on margin, your potential credit is going to be much lower than it can be for real estate. With most mortgages, you’ll need to put 25% down. That’s no reason not to scour the market though. In some areas, you’ll find mortgages which require 5% down or even less! Do your research, and you could control the entire property (and its equity), after paying a miniscule fraction of its value. Obviously you’ll pay the total price in the end. Still, you own the property from the minute you sign the paperwork.

I hope that one of these methods will bring you smoothly into the world of property investment. However, you’ve barely scratched the surface here. Start looking into the entire niche, and soon you’ll have a much more solid plan under your belt.

 

LEAVE A REPLY

Please enter your comment!
Please enter your name here