A growing popular venture for investors at all levels is investing in real estate. One of the chief reasons for this is that there are a lot of ways to profit from real estate investments. The possibilities for making your Lawrenceville real estate investments profitable are endless- from buying and “flipping” properties to get instant cash to owning rental homes for long-term wealth building.
For many investors, the question of how to maximize profits boils down to two key things: selling versus renting. In this article, we’ll closely examine how real estate investors are profiting from both, which may be the greater option for different investing styles and situations.
Selling as an Investment Strategy
One of the best ways to profit from rental properties is to buy with a plan to sell. Having an endgame for all of their investments from the start is what investors should have in mind. Having selling as an investment strategy changes the focus from buying properties to hold and rent to buying properties that you plan to sell within a shorter amount of time. A common way to prioritize selling as an investment strategy is through “flipping” a house. This means buying, renovating, and selling the property quickly.
But flipping houses isn’t the only strategy investors can use to make use of profit from rental real estate. There are investors who will look for bargain properties that, with some updating, could make great rental homes. When the value goes up, either due to improvements or market appreciation, or both, they turn around and sell the property as a rental home to other investors.
Occupied rental homes can usually be successfully sold as turn-key business opportunities for those finding to add to their investment portfolios without all the work of getting a property ready to rent. Naturally, this strategy will only work if the purchase price is low enough or the market appreciates fast enough to achieve the desired outcome.
Renting as an Investment Strategy
To profit from real estate, another common investment strategy is to buy properties to hold and rent. In general, this style is viewed as a much more effective strategy for long-term wealth building. This strategy lets investors profit from rental houses in 2 ways: collecting rental income every month and then collecting it when the property will be sold. Keep in mind, the year-over-year gain might not look as big as the proceeds from a sale.
The profit from the sale of a long-term rental will be higher since any debt against the property will have been paid down over time. But this depends on how long you hold the property and how well you stop any severe economic downturns from happening. Buying to hold and rent is likely the best option if you have the time to hold property and favor stability over quick payoffs.
Invest Like a Pro
The significant reason why some investors don’t find the buy-and-hold strategy preferable is because of having to deal with tenants. It has been long practiced that rental homes are managed by property owners, and many are not professional landlords and have little property maintenance skills. However, as Lawrenceville’s professional property management companies have grown and improved, more and more investors are looking to the experts to help them expand their profits. Suppose the only reason you desire to sell investment property is that you’re tired of handling bad tenants. In that case, it may be time to hire a professional Lawrenceville property manager to manage it for you.
At Real Property Management Citywide, we aid rental property owners like you build real wealth through real estate investing. To learn more about the services we offer, contact us online or call us at 770-733-1848.
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