5 Essential Real Estate Strategies For Beginners

Real estate lovers, and investing enthusiasts, it's that time of the week again!

This week is an important week!

It's all about what strategy you're going to choose when investing in real estate. How you chose which is best for you, and the pros and cons of a few key strategies for your portfolio.

The real takeaway is

So, with that being said, get started on this week's edition.

But just before that, let me jump in with something important.

If you are interested in real estate and thinking about making your first investment, why do it alone? I have 1-on-1 coaching for new investors available on my website. Just click the button below!

What Are Your Goals?

In day-to-day life, you wouldn't buy something if you had no plan to use it. You wouldn't go to the shop and buy a baseball bat if you never played baseball. Just as you wouldn't spend a few thousand on pads for football if you're planning to be a gymnast.

Real estate is exactly the same. Don't buy the asset if you have no plan for what you are going to do with it.

Real estate, like any other investment, is a risk of your capital. It's tough to make money and it's even tougher when you throw it at something without a real plan in place.

The key is a strategy!

Are you buying to renovate and sell? To rent? To use as a long-term hold?

Not only this but which is best? How do you know what strategy to use?

There are a lot of questions to answer and honestly, it can be tough to find answers.

But have no fear James Town Capital is here ??

Every Strategy Under The Sun.

So here it is. A breakdown of real estate strategies and what they consist of, allowing you to choose which you feel could be a fit for you and your financial goals.

1. Buy and hold rental property

This is arguably the most popular way of investing for both sophisticated investors and also for beginners. It offers many positives and is a very solid strategy if you want to hold a property long-term. It's a way to earn rental income, profit from the appreciation of the property (the price of the property increasing) and also offers some great tax benefits which are worth looking into.

Negatives involve the fact that you have to hold the asset for a long time and also manage tenants as well as the property. But this can be a small price to pay for a long-term asset. To give a small look into the gains that can be made from this average sales price of houses sold in the U.S. has increased by over 200% over the past 20 years, and the demand for rental property is still high throughout any form of economy as people always need a place to live.  

2. Investing Rental Income To Build a Portfolio

Reinvesting rental income is a great way to complement and go alongside our first strategy.

This is a way of building your property portfolio. This consists of saving the net (after expenses and tax) income of the initial rental property until you have enough money to put a downpayment on a second property. This way you effectively get a 'free' second property as it was paid for by your first.

3. House-hack

House hacking is a very entry-level way of investing but one that can be very effective to get into the game. House hacking is basically living in the house you rent, it can be a way of having your mortgage paid for by the people you rent to and saving money for a first property. Examples could be renovating a basement and renting it, renovating a small outhouse on the property and renting it, or renting rooms within your home etc...

It can be an effective way to save money and build equity in your home with other people paying the mortgage.

4. BRRRR

Buy, remodel, rent, refinance, repeat.

This is an option I enjoy it is exactly as it says on the box. You buy a property with the opportunity to improve, then you remodel to increase the value of the home. You then get the lender to appraise the home and see if it has increased in value. Once the value has increased the bank will allow you to refinance and take out the amount of money that the property has increased in value buy.

You can then take that money to use as a downpayment on another property.

Repeat!

This strategy takes effort, organisation and time but can be very effective.

5. Fixing and flipping

This is another one of my favorites and one that I implement in my own portfolio often.

This strategy is where you find a property with potential, under market value that you know you can add value to. You then buy the home and renovate it to increase the value of the property.

At that point, you put the property back on the market and sell for a profit!

This is a more risky strategy that is usually something that is executed by more seasoned investors with access to good deals. The benefit is that it can offer much bigger returns in a short period of time.

Now You Decide

So now you've seen some strategies you can see which fits best for your financial goals. It can be dependent on the amount of risk you want to take or the timeline of return you wish to have.

The most important thing is that you have a strategy! Do not buy a property without knowing what you're going to do with it.

Don't Forget About Next Week!

Want to know more about investing in your first rental property?

Don't worry I have you covered, next week I'll be breaking down another key part of finding and buying that first deal.

So, don't miss out!

And remember, if the process is a little daunting and you want some more hands-on help. I'm happy to guide you through the process.

Feel free to drop me a message, or take a look at my tailored coaching program for brand-new investors where I help you by taking real estate investing from an idea, to reality.

So, that's it for this week's edition!

I hope you not only enjoyed it, but learnt a little too.

See you next time!