If you’re interested real estate investing, you have to give some thought and effort, from time to time, as to what types of investing strategies you’ll likely use in your investments in order to be most successful.
As a Novice investor, you may not have developed a “feel” for what types of investments best suit you and your current situation.
To confuse you even more, there are a ton of potential types of investment opportunities you can pursue from wholesaling, lease options, buy & hold rentals, and more.
Then there’s the issue of financing, whether it be Banks or Financial institutions, your eligibility counts
And finally, what “area” will you be working in from single family homes, multi-family, commercial, or other!
As far as what type of investing to practice, there’s no right or wrong answer, and the answer may just be, “It depends.” That said, at least let’s try to make some sense out of it because there are a few things you should take into consideration when considering an investment strategy, whether it’s your first or your one hundred and first!
5 Considerations to Determine Your Investing Strategy
Here are 5 considerations to take into account when deciding on an investment strategy (or strategies) that best suit you and your real estate investing business:
1. The Current Real Estate Market. Knowing whether the current market is on an upward or downward trend – or just plain flat – is important as there are certain strategies that work better in one type of market than another.
2. Your Knowledge and Experience Level. It’s important to take into consideration your level of knowledge and areas of expertise when determining your preferred investment strategies.
There may be strategies that are working well in your current market and it behoves you to embrace those as long as you have the knowledge, skills, and team to make them happen.
But be cautious when taking on a new strategy, especially something that can have some complexities such as a lease then buys This is where an experienced real estate agent can be invaluable!
3. Your Goals.
What it is you wish to accomplish – and that leads to your goals. What do you hope to accomplish in the next year, 3 years, and 5 years? How much income do you want to make for your efforts and why?
Why is a big question and if you can answer “why” you want to accomplish your goals that will provide a solid sense of direction when your business is sailing some rough waters. No matter how well you run your business always be prepared for the unexpected.
4. Investing Full Time or Part Time?
If you have a great job but want the extra income to have an extra income for your loved ones or build a portfolio of rental properties for your retirement, you can do that!
If you decide full-time investing is what you want to do, you can do that too!
Full-time investors have most of their income derived from their real estate business, so it’s a must to be at the top of your game.
5. Assets and Access to Funds and Financing.
It’s true that you can invest in real estate with little money. But at some point, you have to have some reserve funds in case something unexpected comes up. Having some assets makes the process a lot easier as does having some available cash – or at least access to it.
If you don’t have assets or cash, see if there is anyone within your friends and family that can provide it if the right deal comes up. As you progress with your business, make sure one of your goals is to build assets in the form of cash reserves and equity in your properties.
Holding rental properties is a great way to do all of the above and enjoy some passive income along the way. No matter what your investing strategies, you should ultimately end up in a place where passive income is coming in and, whether you keep working or not, the income stream keeps flowing.
Lastly, have more than one strategy, but don’t get too diluted. You will end up nowhere if you were to chase every investment on earth.
Always keep learning because markets, laws, and techniques change. Remember you can make money in any real estate market, as long as you:
Get a Good property agent to advise you
Reinvest what you made
Treat it as a business
Wait no longer call me to know to know more on which developments that have high returns!