Real estate gives investors a fantastic and lucrative opportunity to make a decent amount of money – but as every top investor will tell you, it isnt as easy as it might first appear. However, some types of real estate investing methods can often bring more success than others. And today, were going to take a look at some of the best techniques for anyone out there who wants to maximize their returns as much as possible. Lets take a closer look at some of your options.
Land and Build
Buying raw land can offer a huge return, assuming you pick the right location, of course. Now, its important to understand that buying land isnt in itself going to make you money, and you will need some capital behind you to invest in building or division of that land. But, as long as you make improvements, it can often see the best returns – you could, potentially, build five or six homes on your land and rake in a fortune.
Land and Rights
Many people have sold land to water, gas, or oil companies and walked away with a fortune. And there is no reason why you cant do the same, although it can take a lot of hard work to find a suitable plot. You dont have to sell the land as a whole, either – you can just sell the rights to use the resources on your property.
Duplex, Triplex, Quads & Apartment Blocks
Build a large, single home on a piece of land, and you could make a lot of money. But build two, three, four or more apartments, and you could bring in a fortune. Whether you are building to sell or rent out, its a reasonably easy step up from the sale of a single home, and many newcomers to real estate investment go down this route.
Building a complex requires a lot of investment and capital to get started. You will be creating huge complex blocks with dozens – possibly hundreds – of apartments, so its easy to see where you might find success. Make sure that you are offering plenty of benefits of living in your complex and you should have no trouble selling them all. Pools, gym areas, shared spaces – all can help create a community-minded environment that people will love to live in. And the returns tend to be huge – were talking multi-millions of dollars worth of investment, however,
Fix and flip
You can also flip houses and apartments The best way to do this is to buy somewhere that is a little past its best, but available for a knockdown price. Then its a case of fixing them up, making them habitable and appealing, and selling on the market for a significant amount more than you paid. As long as the difference is more than you have spent on repair and renovation, its an easy way to turn a profit. This method does require significant experience if you want to earn big bucks, however, And youll also need to have a team of skilled – and trusted – building companies and tradespeople involved to keep your costs down.
Many investors buy a property with the express purpose of renting it out for many years. And its a great way of developing your portfolio – effectively, it costs you nothing as you price your rent in a way that ensures your home loan payments are always covered. You can also make money on rental property, of course, although if you want to make a living out of it, youll need more than just the one. And, as http://www.bankrate.com/finance/real-estate/ point out, bear in mind that every day the property lies empty with no tenants, you will be paying for it yourself.
Bought a home somewhere nice that is a tourist magnet? If so, why not rent out your real estate as a vacation home? In theory, you can charge guests many times more than you can charge renters. So, if you fill your vacation home week in and week out over a year, you can make a killing. Look for an up and coming place for best results. However, you also need to bear in mind that renting out a vacation home is something of a full-time job. You will need to spend a significant amount of money on marketing your property, and you will still need to pay your mortgage when the home is empty.
Be tax efficient
There are many tax laws you need to consider when it comes to owning and selling real estate, so make sure you understand your position. For example, according to http://www.1031gateway.com/articles/1031-exchange-property/, you can save a significant sum of money by transferring your property in a 1031 exchange. There are also ways to save when transferring rights or selling a property after death. Make sure you have the help of an accountant when looking into these tax efficiencies, however, as the rules can be complicated and you need the assurance of a professional eye.
Pay with cash
Cash buyers are in a very strong position when it comes to real estate. Many sellers will be happy to give you a discount because there is no chain involved, which, ultimately means they can get out of their home and into their new one far quicker. You can then make some improvements to the property, and sell it on at full market price whenever you like – or keep it and look into renting it out.
Cut out the middleman
Finally, once you get started in real estate, you will find an extraordinary amount of fees occur when you are buying and selling. And, its fair to say that your experience will teach you that sometimes these middlemen are entirely unnecessary once you know what you are doing. Ultimately, if you buy a property and sell it straight away without the middlemen, you could still turn a profit.
To summarize, there are a huge array of ways to approach real estate investment. The trick is to find a method that suits you, stick to it, and make as much money as you possibly can. Good luck!