How to Choose the Real Estate Investment Strategy For You

With the collapse of the housing market and some areas of the United States experiencing a decline of up to 50% in the values of homes, many houses have turned as foreclosures. It is estimated that 1 out of every 30 homes in America is in some stage of foreclosure. Banks are being deluged with the number of foreclosed homes they have on their balance sheet. They are highly motivated to sell them and are willing to sell them for pennies on the dollar. This is an excellent opportunity to purchase homes at a very cheap amount. There are a lot of websites that show you these properties, online investing is a consideration for the housing market.

For someone looking for a high return on capital invested, commercial property investment is always a possible choice. This area of real estate offers rewards that would be difficult to match with most other investments. However, as with any investment, there is always some risk involved. With the right planning, however, you can minimize your risk and stand a good chance of making a substantial profit. Here are Top real estate investment company strategies that can make investing profitable for you:

Flipping

Flipping is the term used to describe buying a house at below market value, fixing it up and then selling it for a quick profit. Flipping requires purchasing a house at up to 60% or more of the true market value. By purchasing the property at such a discount, it leaves room to cover the cost of the renovations while leaving you room to make a profit.

 

Long Term Rentals

Another way to create a steady stream of income is to have long term rental properties. You will collect rents from tenants that will be used to pay for the mortgage on the building. The goal is to have the monthly rent amount to be greatly more than the monthly mortgage payment. However, you have to evaluate its current value and what the potential is in terms of changes, renovations or expansions you are planning. If it requires lots of work before it can turn a profit, you have to be sure to consider all the expenses, including taxes, legal fees, and insurance. For most investors, you will be able to realize a tax deduction from having rental properties because you can deduct the mortgage interest and taxes as well as depreciation on the property.

Before making an investment, get to know some people in the area who are knowledgeable about the business climate. Network with members of the local business community. If there is a real estate investor’s club in the area, join it. This can be the very best way to gather inside information about opportunities and specific properties.

These are some of the strategies that can help you make profitable property investment choices.