By Ashley Osborne | Head of UK Residential & Managing Director – International Properties
It’s quite known that investing in real estate is a great way to make more money, however, very few know how to do it effectively. It is by no means a complicated process. At the minimum, you need to know how much the house costs, what its market value is, and how much you plan to sell or rent it for. But that’s not enough to yield the best results from your real estate investment.
To maximize your profit, you will need to dig deeper. You need to look beyond the house and look at factors surrounding the property that makes it ideal. You would also need to select the method you plan to use to make money from your investment. An example of three of the most common and tested ways of making money in real estate are as follow:
- Buy and Hold
- Buy a home and hold for a significant length of time either buy staying in it or renting it. This long-term strategy is often used by those looking to live off the cashflow in retirement.
- Buy and Let
- The most common form of investment if you are looking for consistent revenue stream. It involves buying a home and then renting it – often in developed neighbourhoods as the value of rental property is significantly higher.
- Buy properties for short-term goals
- A more controllable strategy as the appreciation of your property is directly related with how much you save on purchasing or how much extra you gained on reselling. The profit gain can often be enticed with renovating the property after purchasing.
Whichever strategy you apply, there is no “single” best way to make money in real estate. It all depends on your preferences and goals. But despite having no best way, the following common tips are applicable to all real estate investments.
- Educate Yourself on Different Strategies
- Besides the strategies mentioned above, there are plethora of creative strategies in between. The key is to find the right one at the right time. For new investors, real estate wholesaling is a good strategy. Although the profits will be minimum, you will gain a lot of experience from buying and reselling properties quickly.
- Be Proactive in Your Search
- Finding good properties does not necessarily mean it will be the most profitable. If your goals are to maximize profit, then you must be proactive in your search. Stay ahead of the market by looking out for potential properties to go on sale or new properties that just got put on the market.
- There are also properties in off-markets – often owned by people who do not want it or cannot afford it anymore. These distressed property owners are looking to sell the property as quickly as possible and will thus often take less than the market value, providing you with the best profit margins.
- Follow a Proven System and Act on It
- Keep things simple and follow step-by-step process that you can refine over time to suit your own goals. Seeking professional help as early as possible can make things much simpler and potentially help you yield higher return on your investment as you get to avoid a lot of trial-and-errors that would have cost you otherwise.
The amount of success you will see in real estate is only guaranteed by how much effort you put into it. Improve your chances by constantly seeking ways to learn more about the industry or by getting in touch with professionals to get you started in making money from real estate.