Apart from being a new year, 2020 marks the beginning of a new decade, bringing with it new opportunities to anyone looking to get ahead in the real estate game. There are two keys to do this: a good understanding of the state of your local real estate market and the grit to adjust your approach accordingly.
With that being said, here are four real estate investment strategies to try out this year:
1. Fixing and Flipping
The concept of fixing and flipping boils down to finding a property at a prime location, making improvements to it, and selling it at a higher price than it was purchased for. Fixing and flipping is by no means a new strategy, but it’s nevertheless a tried and tested one. It also leverages the unshakeable real estate principle of “location, location, location.” Again, when it comes to fixing and flipping, you want to buy low and sell high, but always with a property with a nascent appeal due to location.
2. Real Estate Wholesaling
No, this doesn’t mean buying a number of properties and reselling them in bulk, as the name might suggest.
Wholesaling involves taking a distressed property, further negotiating its price precisely because it’s distressed, and reselling it to someone else who may want to fix and flip the property themselves.
Given the lack of any developments or improvements to the property, you can’t expect large profit margins with this trick. Still, it’s a good way for beginners to get the flow of the documentary and market intricacies of the business.
3. Buy and Hold
Property values appreciate at much more lucrative rates in certain markets compared to others.
Another principle you can leverage is the buy and hold strategy, which requires purchasing a property in an area with a significantly high appreciation rate for properties.
You can then rent the property out to generate a passive source of income while paying for your investment. You can also let the property sit while appreciation does its thing. You then resell reselling the property once it’s reached a value that would yield a significant return on your investment.
4. Buy to Rent
Although it’s by no means new or exciting, buying a property with the intention to earn from it by leasing it out is a tried and tested method that bears repeating here. You can enjoy benefits like consistent income, earning enough to invest in other properties, and tax deductions for traditional rental setups.
For this strategy to work, however, you need to properly calculate your rental fees to ensure that your income is higher than your expenses. If you’re open to newer types of rental agreements, set up your property for short-term rental apps like Airbnb and the like, which actually generate greater total revenue than traditional rental setups.
The basic principles and dynamics of real estate investment are unlikely to see any drastic changes in 2020. However, certain market conditions will make some strategies more favorable than others. Pay attention and be ready to adapt, and the rewards of real estate investment will be yours to reap.
To learn more about real estate investing, partner with Blue Hen Homebuyers. Call our offices today at 910-802-2222 to discuss how we can help.