A progressively 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. There are various limitless opportunities for making your University City real estate investments profitable- from buying and “flipping” properties to get instant cash to owning rental homes for long-term wealth building.
The question of how to maximize profits, for the majority of investors, boils down to two key options: selling versus renting. In this article, we’ll closely examine how real estate investors are profiting from both and which may be the better option for different investing styles and situations.
Selling as an Investment Strategy
A significantly better way 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. If one uses selling as an investment strategy, it shifts the focus from buying properties to hold and rent to buying properties that you plan to sell within a shorter amount of time. To prioritize selling as an investment strategy, you could do it 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 search for bargain properties that, with a bit of updating, could make great rental homes. After that, if 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 often be successfully sold as turn-key business opportunities for those searching to include in 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
A second frequent investment strategy to profit from real estate is to buy properties to hold and rent. This style, in general, is seen to be a much more effective strategy for long-term wealth building. This strategy permits investors to profit from rental houses by collecting rental income every month and then again when the property is going to be sold. However, the year-over-year profit might not look as big as the proceeds from a sale.
The financial gain from the sale of a long-term rental is more or less going to 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 evade any severe economic downturns. If you have the time to hold property and favor stability over quick payoffs, buying to hold and rent is probably your best option.
Invest Like a Pro
Perhaps the biggest reason some investors don’t find the buy-and-hold strategy preferable is 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 University City professional property management companies have continued to grow and improve, several investors are looking to the experts to help them expand their profits. If the only reason you like to sell investment property is that you’re tired of managing bad tenants, it may be time to hire a professional University City property manager to do the job for you.
We help rental property owners like you build real wealth through real estate investing at Real Property Management Experts. To learn more about the services we offer, contact us online or call us at 704-220-0110.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
