Property Investment Strategies
In this section of PropertyInvesting.com, we delve into various ways you can make money from your property investments.
While there’s an infinite number of ways to make money using real estate, it’s likely the property investment strategy being implemented is a variation of the five options outlined below.
Choosing the right property investment strategy is all about matching the right real estate problem with the right investing solution. Your choice of which strategy to implement depends on two factors:
- The profit outcome you want to achieve (ie. capital gains and/or positive cashflow returns); and
- The needs of the person who’ll be paying you money in exchange for the use of the property.
Maximising your property investment returns
Typically, the most profitable property investments are made when you tailor the needs of the person using your property to the appropriate investing strategy, rather than the other way around.
For example, if I can find a client who wants to buy a property from me under a wrap strategy, then my cashflow return will be higher than if I had chosen to simply rent it out (using the ‘Buy and Hold’ technique).
If you already own property investments, then the key to increasing your returns is to better serve the needs of your client. For example, if you have a tenant then look for ways to increase the rent that also provides your tenant with more enjoyment from your property.
A good example is the installation of ceiling fans in a house that has poor ventilation. If the tenant agrees, then once the fans are operational then you can justify an increase to the rent; it’s a win-win outcome where you have more rent and the tenant has a better quality of life.
What this is all about…
This section is designed to give you an outline of the five property investment strategies listed below, but is not designed to be an exhaustive guide to these strategies. Our aim is to help you appreciate that there’s a lot more to the world of property investment than simply buying a property and renting it out.
If you’re interested in finding out more about these property investment strategies then I encourage you to visit the discussion forum.
Property Investment Strategies Snapshot
|Buy & Hold
|Most common property investment strategy where you buy a property and rent it out with the aim of making capital gains and / or income returns.
|The idea is to make money by adding value to the property through improvements
|Creative ‘Low / No Cash Down’ Techniques
|Short-term fast-cash property investment strategy where you buy a property and then sell it again before title transfers into your name.
|A property investment strategy that takes a residential lease and provides the tenant with an option to buy too.
|Wraps (Vendor Financing)
|Buy a property and then sell it on ‘vendor’s terms’. Receive regular payments rather than a lump sum settlement payout.
Time to get creative…
We firmly believe that you don’t need to be a rocket scientist to begin making substantial real estate profits out of property investment. All you need is the right property, bought at the right price, with the right person living in it, under the right property investment strategy.
However, having said that, the property investment market is constantly changing, often dramatically. While some experts believe that certain changes in the current market may spell the end for property investment as a strategy for continued profit, others believe it will just mean the end of the seller’s market and the beginning of a great time for astute and well prepared buyers (investors).
So read up on the various tools available to you, and then get creative!