An increasingly favored venture for investors at all levels is investing in real estate. One of the key reasons for this is that there are a lot of ways to profit from real estate investments. From buying and “flipping” properties to get instant cash to owning rental homes for long-term wealth building, the possible opportunities for making your Maple Grove real estate investments profitable are seemingly endless.
The question of how to maximize profits, for most investors, boils down to two key options: selling versus renting. In this article, we’ll take an in-depth look at how real estate investors are profiting from both and which may be the preferable option for different investing styles and situations.
Selling as an Investment Strategy
One of the best ways to profit from rental properties is to buy with a plan to sell. From the start, having an endgame plan for all of their investments is what investors should have in mind. Having selling as an investment strategy changes the focus from buying properties to hold and rent to buying properties that you plan to sell within a shorter amount of time. A common way to prioritize selling as an investment strategy is through “flipping” a house. This means buying, renovating, and selling the property quickly.
Flipping houses, however, isn’t the only strategy for investors to make use of profit from rental real estate. There are investors who will look for bargain properties that, with some updating, could make great rental homes. After that, once the value goes up, either due to improvements or market appreciation, or both, they turn around and sell the property as a rental home to other investors.
Occupied rental homes can usually be successfully sold as turn-key business opportunities for those finding to add to their investment portfolios without all the work of getting a property ready to rent. Naturally, this strategy will only work if the purchase price is low enough or the market appreciates fast enough to result in the preferred outcome.
Renting as an Investment Strategy
To profit from real estate, another common investment strategy is to buy properties to hold and rent. This approach is generally viewed to be a much more effective strategy for long-term wealth building. This strategy allows investors to profit from rental houses via collecting rental income every month and then collecting rental income when the property will be sold. Although the year-over-year profit might not look as big as the proceeds from a sale.
The profit from the sale of a long-term rental is more or less going to be higher since any debt against the property will have been paid down over time. But this depends on how long you hold the property and how well you avoid any severe economic downturns. Buying to hold and rent is presumably the best option if you have the time to hold property and prefer stability over quick payoffs.
Invest Like a Pro
Maybe the top reason some investors don’t find the buy-and-hold strategy appealing is dealing with tenants. It has often expected that rental homes are managed by property owners, and a lot of them are not professional landlords and have little property maintenance skills. Though Maple Grove professional property management companies have been getting bigger and improving, more and more investors are looking to the experts to help them expand their profits. If the only reason you’re thinking of selling an investment property is that you’re tired of handling bad tenants, it may be time to hire a professional Maple Grove property manager to manage it for you.
At Real Property Management Fidelis, we make certain rental property owners like you build real wealth through real estate investing. To learn more about the services we offer, contact us online or call us at 844-365-7368.
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