BY JOANE AKPORHUARHO
FOR: EAUSTON SOLUTIONS AND PROPERTIES
Deciding on the best strategies for property investment can seem difficult for both investment enthusiasts and first-time investors. Consider the following strategies to overcome the challenges of the real estate market.
Look out for properties on distress sale:
A distress sale is an urgent sale of a property, at a comparatively lower rate than the actual value of the property, usually to meet pending financial needs or expenses of the vendor. Besides prospects for capital appreciation, at the time of purchase, an investor enjoys a guaranteed return on his investment to the tune of the difference between his purchase price and the going rate of properties around the location.
Distress sales require that investors have the purchasing power at the time of the offer. Investors should however be weary of prices that are ridiculously lower than the market value of a property as they might turn out to be fraudulent sales.
NOTE: It is essential for an investor to have access to financing and be ready to make an offer when the opportunity arises because distress sales have limited time frames in the market.
Consider the potential for property appreciation:
Most certainly, properties tend to appreciate in value over time. Property appreciation is usually triggered by factors like an increase in demand for that property or similar properties, community and urban development, infrastructural improvements, an attractive business environment. Properties with a higher potential for appreciation are definitely a more favorable investment option.
It is crucial to understand these factors that can drive value for property appreciation as they largely influence the return on investments.
Real estate investment partnerships:
Partnerships offer an opportunity for investors to pool resources for an investment. A real estate investment partnership is an investment strategy that integrates the strengths of two or more investors into a single investment vehicle.
It reduces the burden of capital contribution and associated risks, while preserving the interest of the partners. The returns on investment are proportionate to the capital contribution of the partners.
Investors can either manage the investment or appoint an independent manager.
Rental properties for cash flow:
Investing in rental properties is a popular strategy for cash flow. This is suitable for investors seeking a steady stream of income. They could either purchase a property, renovate and resell at a higher value or develop residential or commercial properties for lease.
The income and revenue generated ensures a steady stream of passive income. Notwithstanding, it may take a longer time to realize the entire capital and profits. Investors can take on the responsibility of managing the property or work with a property management company to handle the daily operations and maintenance while they focus on other business ventures.
Land banking as a strategy for future financial goals
Land banking is a Long-term investment strategy which involves purchasing a property and holding for an extended period to generate capital growth. This is a rewarding investment for investors looking to diversify their real estate portfolio. The primary benefit of land banking is the ability to generate large profits very quickly. This makes it ideal for investors who need capital for future projects but have limited resources.
Fondly called “buy and hold”, it entails the buying of land in locations with potential for appreciation with the intention of reselling when demand is high thereby making a huge return on investment.
Investors should be patient enough to give room for optimum capital appreciation. Regardless, “buy and hold” is a renowned investment strategy that can be accounted for over the span of years.
Conclusion
Before making a decision on your next real estate investment, it is advised that you understand the type of investment strategies that suit your preference. you must have analyzed your current financial strength, evaluated your risk tolerance and defined your investment goals. Property investment offer various opportunities for income generation and sustainability. Whether you are looking out for distress sale or rental properties, looking for areas with high demand, or investment partnerships, make sure to conduct a thorough due diligence on your investment choice and the factors governing them. This provides you valuable insights and can make informed real estate investment decisions.
For property consultation and investment opportunities. Reach us on clientsupport@eaustonsolutions.com
See also https://eauston.com/blogs/singles/Factors_that_enhances_Property_Appreciation
