5 Key Property Investment Strategies You Need to Know About

property investment strategiesThinking about investing in real estate?

Wondering what the best property investment strategies are?

Real estate and property are some of the smartest investments you can make. However, there is more than one way you can go about investing in property and different ways you can go about getting the highest returns.

Below are some of the top property investment strategies that you need to be familiar with if you want to succeed.

1. Single Tenant Leasing

One of the simplest and easiest ways to invest in a property such as a single-family home is to lease it to a single tenant. This strategy can be a great way to develop stable income over time.

Dealing with only one tenant at a time can really make the process easier to handle, especially if you’re new to managing a rental property.

While it will always be difficult to find the perfect tenant, once you find the perfect family or tenant for your single family home, it can be clear sailing from there. You’ll be able to avoid dealing with the problems you face with multiple tenant properties.

2. Multiple Tenant Home Leasing

Similar to single renter leasing, with this strategy you will be managing only one property. However, instead of renting a home or building out to only one tenant, you will be renting the rooms out individually to multiple tenants.

You may be leasing out the different rooms to college students, for example, or running the home as a Bed and Breakfast. In the case of a duplex, you may be renting out a home to multiple families.

If done correctly, this can be even more lucrative than the single renter strategy. However, it comes with several drawbacks. It can be much more difficult to find and maintain multiple trustworthy renters as opposed to only one. You will also have to deal with a higher amount of tenant turnover.

3. Buy and Hold

Another common strategy used by many real estate investors is to buy a property and simply let it sit for several years, waiting for the value to appreciate. Over time the value of a home will most likely rise in value, depending on several factors.

Since the real estate market fluctuates, it can be a great strategy to buy a property and then wait for the market to become strong again before selling. However, even when the market is strong, buying a property and holding it can be a good strategy.

This can particularly be a good strategy if you’re able to get a property in an area that is expected to experience a lot of growth or development in the coming years.

4. Renovation and Repairs

Another excellent strategy for making money off of real estate is to buy a damaged or neglected property and make renovation in order to increase its value.

With the new look and improvements, it will be able to be sold for much more than you bought it for and increase the After Repair Value (ARV).

However, this method will take a lot of know-how and will require a lot of effort, especially if you plan on renovating the property on your own.

On the other hand, if you plan to hire out the renovations you will need to watch your budget and ensure that after all spending money on repairs you will still be able to make a profit.

5. Commercial Property Leasing

Another potential strategy for property investment is to invest in commercial property. If successful, this can be a great way to make a large amount of stable income.

If a business that rents your property is successful, for example, you likely won’t have to worry about finding a new tenant for many years to come. You will have a lot of stability that you are less likely to have with other types of properties.

However, commercial properties can also be incredibly risky because sometimes they can go unrented for a long time. It can often be difficult to find a new tenant for a building.

Making the Most of Property Investment Strategies

No matter what strategy you choose, it’s important to keep your eyes on your long-term goals. Sometimes it pays to ignore what other investors are doing and take a risk on a property.

All types of investments can be risky, but by following the proven property investment strategies above you’ll have the best chance possible at making stable and rewarding investments that will benefit you for years to come.

Are you a homeowner or investor looking for property management services? Clockwork Property Management can help. Contact us today to see what we can do for you.