Investing in real estate is an increasingly popular undertaking for investors at all levels. Classified among the major reasons for this is that there are so 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 possibly endless strategies for keeping your Ojai real estate investments profitable.
For some investors, the matter of how to maximize profits boils down to two main options: selling versus renting. In this write-up, we’ll look closer at how real estate investors are profiting from both and which may be an excellent option for different investing styles and situations.
Selling as an Investment Strategy
Among the top ways to profit from rental properties is to buy with a plan to sell. Investors must have the endgame in mind for all of their investments at the outset. 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 lesser amount of time. Contained in the more famous practices to prioritize selling as an investment strategy is through “flipping” a house, which means buying, renovating, and selling the property quickly.
Though flipping houses isn’t the only strategy investors use to profit from rental real estate. Several investors will search for 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 takes effect 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.
Depending on how long you hold the property (and barring 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 have time to keep property and prefer stability over quick payoffs, buying to hold and rent is probably your best option.
Invest Like a Pro
Possibly the major consideration why the 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 really, as Ojai professional property management companies have expanded and improved, many more investors are turning to the experts to aid them to maximize their profits. If the only solid reason you yearn to sell investment property is that you’re tired of accommodating bad tenants, it might be time to hire a professional Ojai property manager to administer it for you.
At Real Property Management Limitless, we actually 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 805-702-7800.
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