Lots of people have said that real estate is where it’s at when it comes to investing, but what they don’t talk about are the different ways to do it.
When you think of real estate investors, what comes to mind first?
Is it flippers? Thanks to so many of the HGTV or similar shows, that might very well be the case. Shows like these have made flipping and remodeling very popular.
But flipping is only one aspect of real estate investing.
The most common method of real estate investing that promotes long-term wealth is actually what is called the buy-and-hold strategy.
Here’s a thorough example of rental strategies that can be long or short term, depending on what area you’re in and what route you want to take.
Long-term rental strategies are the traditional year-long or more leases that have a tenant living in the property.
Short-term rental properties are more along the lines of AirBnB or similar services, where the properties are in areas of high demand and people are looking to rent a home during a stay in the area.
The difference between the two is the profit vs the time spent on it as a business.
When it comes to long-term rental properties, it’s important to have things in place like property management, liability or landlord insurance, and a lease.
With short-term renting, you have to make sure the bookings are managed, there’s always a 24/7 emergency service, a cleaning crew in between each visit, managing the reviews and stays of each guest, and the furnishings and other things for the property that a guest would expect to have.
There’s a little more work involved in this method, but the returns are 2-3x higher or more. It’s more of a business than just being a landlord, which affords different kinds of opportunities because of the type of connections you can build with other events or businesses in your local community.
Either way, it’s important to do your research when getting into rental strategies like this.
The first thing to do is understand your market, then begin your search for different types of properties that are for sale or are about to come up from lease in 1-2 months.
You may want to prioritize special destination areas or maybe high-interest places like downtowns, concert zones, or beaches.
You can approach homeowners that usually go with long-term leases and see if they may be interested in partnering up with a short-term rental model.
This can prove one way to start lining up a bunch of properties without taking cash out of your pocket.
As always, check back on our homepage to find out more about real estate strategies as we’re going to continue bringing more and more updates!