Where to Invest?

What’s Your Strategy for Your Real Estate Investment?

You no doubt already know that there are numerous ways to invest in real estate, but have you chosen the strategy that will work best for you, your portfolio, and your investing style? Different strategies have different levels of involvement, with some being more active and others being almost entirely passive. You should consider this when you decide which type(s) of properties to invest in, and you should consider which strategies are best suited for your budget now and in the future.

Cash Flow Rental Properties

The first type of real estate investment that most people consider is a single-family rental property that will bring in monthly cash flow to increase your wealth. You can purchase this type of property in a couple of different ways, depending on how much time you can afford to invest and how much capital you have for your initial investment.

Foreclosure Properties

Some investors with more time and less capital will opt for purchasing distressed properties in short sales or at foreclosure auctions. They’ll then renovate the properties, rent them out, and act as their own property managers. On paper, this will almost always result in a higher profit margin, but it also involves higher risk (properties that need more work than you bargained for). It also requires much more time and energy.

Turnkey Rental Properties

Other savvy real estate investors will put a little bit more capital into their initial investment for turnkey properties that are move-in ready with no need for renovations. These properties often come with property management services, and some even come with tenants already in place. While you will spend more on the front end for one of these properties, you are almost guaranteed to begin collecting positive cash flow immediately and consistently.

REITs (Real Estate Investment Trusts)

If you’re looking for a real estate investment strategy that’s completely hands-free and passive, you may want to consider investing with an REIT. When you do this, you will not actually purchase a property or a piece of a property, but rather you’ll purchase stock in the trust itself. The trust will then invest your funds – combined with other investors’ funds – to purchase larger investment properties, such as condominium complexes or retail spaces. As long as you own shares in the REIT, you will collect returns, usually on a quarterly basis.

These are only a few of the most common and popular real estate investment strategies. Before you invest, find out more about each of these, as well as other real estate investing strategies and get expert advice on the best types of investments to improve your ROI and grow your investment portfolio.