Are you losing money in all kind of speculative instruments like share, bonds and forex and are wondering what asset class to invest in? Why not consider real estate investment with its traditionally higher yields as compared to leaving your money in your bank account.
Discussed here in this article are four common strategies that real estate investors use to make money in property investment.
Money Making Method #1 - Purchase run down property and spruce it up
This method involves finding a run down property in a good area that you think has promise for resale and sprucing it up like some of the shows where people do an extreme makeover on the property. Hence, you will need to redecorate and repair it and then you can resell this real estate for a much higher price.
Bring along a good structural engineer or architect when you do look for such properties so as to ensure that the renovation works that you have to do will not be so extensive that it does not become worth your while to purchase the property.
The key consideration when investing in this kind of real estate is to keep your renovation costs low but ensure that the basic utilities like the electricity, water and gas pipes are in good working condition.
Money Making Method #2 – Find places with high rentals
Find areas with traditionally high rental returns that outperform the national average and then spend time looking for them and make money from the rentals.
In this type of real estate investment, spending some time to find the real estate investment that is a bargain is a good idea, so that you can get better return on investment.
Rental yields or return on investment is critical when you decide what type of property you wish to purchase.
Money Making Method #3 - Purchase foreclosed property
Most people will know that foreclosed property usually fetches a lower price than the market value since banks are often eager to sell at a price that covers their mortgages or sometimes they just want to liquidate the property. Such properties tend to be auctioned off and you can then resell them for a higher value subsequently. However beware of hidden defects in auction properties and always arrange for a visit down to the property just to check it out.
Two people you should bring with you when deciding on this type of real estate investment is your professional engineer and your contractor. You want to check for hidden defects in your real estate investment to avoid buying a defective property that would cost loads of money just to repair.
Money Making Method #4- Cash Flow Investment
According to Robert T. Kiyosaki, the best investment you get is when you find a property at a bargain and then purchase it with as much debt as possible and then generate a cash flow from the difference between the monthly rent and the mortgage instalment. This method is highly interesting and requires you to really spend time looking for such a real estate investment that fits in that criteria.
Remember that real estate investment is dependent on rental and the higher the proposed rental the better your monthly cash flow is. You could also purchase the property at a lower price and this would mean that your monthly cash flow would improve. Note that once your property is partly paid up, you can refinance your loan and extract out some money and purchase a second property and so on. Soon you would have multiple streams of income from the purchase of one real estate investment property.
In conclusion, there are many ways to make money from real estate investment and what’s missing is massive action on your part. Take massive action and start hunting for your ideal real estate investment property today and start generating substantial real estate investment property profits.
Source: Joel Teo | The Real Estate Investment Site
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