Investing in real estate is an increasingly popular business project for investors at all levels. Part of the primary reason for this is that there are too many different ways to profit from real estate investments. From buying and “flipping” properties to get instant cash to owning rental homes for long-term wealth building, there are probably endless strategies for maintaining and keeping your Madison Heights real estate investments profitable.
For several investors, the challenge of how to maximize profits boils down to two main options: selling versus renting. In this article, we’ll look closely at how real estate investors are profiting from both and which may be a good option for different investing styles and situations.
Selling as an Investment Strategy
Included in the top ways to profit from rental properties is to buy with a plan to sell. Investors should have the endgame in mind for all of their investments for starters. The selling as an investment strategy shifts the focus from buying properties to hold and rent to buying properties that you plan to sell within a little amount of time. Classified among the more well-known processes to prioritize selling as an investment strategy is through “flipping” a house, which means buying, renovating, and selling the property quickly.
Although flipping houses isn’t the only strategy investors use to profit from rental real estate. Many investors will seek bargain properties that, with some updating, could give rise to excellent rental homes. Thereupon, if the value goes up, either because of 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 beneficially sold as turn-key business opportunities to those looking to add to their investment portfolios without all the labor of achieving a property prepped to rent. Naturally, this strategy only works successfully if the purchase price is low enough or the market appreciates fast enough to result in the desired return.
Renting as an Investment Strategy
Another general investment strategy to profit from real estate is to buy properties to hold and rent. This tactic is regularly regarded to be a much more effective strategy for long-term wealth building. Though the year-over-year profits might not look as big as the proceeds from a sale, this strategy gets investors to profit from rental houses in two approaches: collecting rental income every month and then again when the property is eventually sold.
Based on how long you hold the property (and excluding any serious economic downturns), the proceeds from the sale of a long-term rental are likely to be much higher since any debt against the property will have been paid down over time. If you do have time to hold property and prefer stability over quick payoffs, buying to hold and rent is probably your best option.
Invest Like a Pro
Possibly the biggest consideration majority of investors don’t find the buy-and-hold strategy alluring is dealing with tenants. Mainly, rental homes have been managed by property owners, most of whom are not professional landlords and have little property maintenance skills. But certainly, as Madison Heights professional property management companies have expanded and greatly improved, several more investors are turning to the experts to aid them to maximize their profits. If the only strong reason you are wanting to sell investment property is that you’re tired of accommodating bad tenants, it might be the perfect time to hire a professional Madison Heights property manager to administer it for you.
At Real Property Management Advantage, we certainly can help 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 248-259-2575.
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