Real estate is a massive industry.
And with that, comes a slew of different investing strategies. There’s something for everyone on this list, so finding something that fits shouldn’t be an issue.
There are passive strategies, active strategies, and some in between.
We’re wasting no time, let’s begin!
Fix-and-Flip
This is a classic real estate investment strategy.
The main goal is to acquire a property that could use some work and make the necessary renovations to then sell the house for a higher price than you bought it. The idea is that the renovations will make the property far more valuable, which is where you justify the profit.
Value-adding is relatively straightforward.
Some of the most valuable renovations include kitchen or bathroom upgrades, attic conversions, or maybe even some solar panels.
Anything that will make it worth more.
BRRRR Model
As you can assume, BRRRR is an acronym.
It stands for Buy, Rehab, Rent, Refinance, Repeat. So, if we follow that model, first you need to find a house worth buying. Ideally, one that could use a little bit of love and labor. That way, you can rent for a higher price and improve the refinancing process.
The goal is to eventually acquire a new loan after the property is already occupied by a tenant so that you can earn an income on the property and get a better rate on the loan.
After you get the new loan (refinancing) you repeat!
House Hacking
This strategy has become quite popular over the years.
You want to find a house that has multiple units. Some options include a duplex, triplex, or another type of multi-family home. To effectively “house hack” you live in one unit while renting out the other(s).
Depending on the price of the property and the loan you’ve acquired, this can quickly become a cash cow. If you’re living in a duplex and got a good deal on it, you might even manage to make a monthly profit.
A lot of people do this with the goal of offsetting their mortgage to pay less than they normally would, but it is possible to make additional money!
REITs
This strategy is incredibly passive.
A REIT is what’s known as a real estate investment trust. You can think of it like a mutual fund, but instead of investing in stocks, you’re investing in real estate. Often these will include commercial properties as well which exposes you to different sectors of the market.
A REIT is basically a pool of money that invests in real estate with (almost) no required work from the investors. You just must deposit money into the fund.
Wholesaling
A wholesaler in real estate doesn’t actually purchase anything.
They put a potential deal under contract and sell it to an investor so that they can do the work to carry out the deal. Essentially, the wholesaler is a middleman. They look for distressed properties that are priced below market value so that it’s appealing to a potential investor.
If you’re good at spotting deals and making connections, this might be the strategy for you.