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8 Real Estate Investment Strategies You Should Know

What sets real estate businesses apart from others are their predictable cash flow and protection from inflation. If the stock market collapses, homes won’t drop their value. Instead, they increase and rents get more expensive.

A lot of stock investors say that their craft is better because their businesses require a little capital for others to participate in. Yet, they forget that banks can leverage real estate investors and not stock investors. This gives you more ease and options when thinking of going into the real estate business.

Now that I’ve convinced you to consider real estate investment, here are several strategies you can apply. Depending on your budget for now and the time you have for managing the business, these different techniques can perfectly match your conditions for a good investment.

1.  Become an agent or a property manager

If you lack the money to buy a property yet, you can start by learning the tips and tricks in the real estate business. Here, you can build your portfolio and gather connections. When you have enough money to invest or buy a property, you can use the experience and contacts you’ve made to help in taking your own business to the next level.

2.  House-hacking

This strategy works for owners of multi-family properties. If you own one and have vacant rooms or areas in your house, you can let these vacant areas be rented out. You can even let the garage area be occupied.

If you’re paying a mortgage, this strategy is ideal for you. If you have a lot of tenants, you can cover the mortgage, electricity, and water bills while earning profits of your own. And you can use these profits to buy another multi-family property to be house-hacked.

3.  House-flipping

House-flipping is a strategy of buying a home cheaply, making improvements or renovations, and then selling in higher than the price of the total cost.  The idea of this strategy is to get in and get out fast.

Considering this strategy you have to watch out for how quickly the market moves. It is risky as you have to target areas with high demand for property. After buying a unit, you have to make improvements fast and sell fast before the market price drops.

4.  Live-in-then-rent

Similar to house-hacking, the live-in-then-rent strat differs on one thing - you don’t live with your tenants. You live in the house alone first and make preparations to transform the house into a rental property.

When everything is ready, you move out and have the house rented out to either a family or to multiple tenants.

5.  Running a BnB, guesthouse, or hotel

If you’re passionate about providing great services then this strategy is the best for you. Running these kinds of business requires you to be attentive to details such as:

  • Greet guests
  • Cooking tasty breakfasts
  • Cleaning rooms
  • Changing bed sheets
  • Dealing with bookings
  • Guest inquiries

This business may not be a get rich quick scheme but it will give you valuable experiences in formulating servicing strategies. And if you don’t want to handle running the business alone, you can always hire amazing people to take care of it while you focus on other businesses while earning a passive income.

6.  Buy-to-rent

The most simple and direct form of real estate investment. This investment strategy is also most common among first-time investors. All you need is to buy a home and have it rented to a tenant or a family.

Buy-to-run is simple to understand, set up, and fuss-free to run. It also is a good investment for retirement. You don’t need to be a real estate agent or property manager to ensure to run one.

7.  Live-in-flip

Combine some aspects from the live-in-then-rent strategy and house-flipping, then you’ll get a business that could reach up to $500,000 with NO tax. All you need to do is buy a house for a low price, live in it for two years while making improvements, move out, and then sell it for a higher price.

8.  Buy-Rehab-Rent-Refinance-Repeat Investing

With the BRRRR real estate investment strategy, running out of cash in your early investing career can be avoided. What you need to do is buy a rundown house below its full price and have it renovated. After the renovation, let the house be rented out. From its passive income generated, use that income to buy another rundown house and repeat the cycle.

“Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.” – Franklin D. Roosevelt, 32nd President of the United States

If you’re ready, make Landlord Prep your go-to resource for landlording education. Here, we offer a complete DIY landlording course to get you on the right track. Join our academy today. If you want, you can check out Flavia’s real estate investing webinar first!