An increasingly popular venture for investors at all levels is investing in real estate. One of the primary reasons for this is that there are various 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, there are seemingly limitless opportunities for making your Nixa real estate investments profitable.
For many investors, the question of how to maximize profits boils down to two key things: 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 more excellent option for different investing styles and situations.
Selling as an Investment Strategy
A good way to profit from rental properties is to buy with a plan to sell. To have the endgame in mind for all of their investments is what investors need from the start. Selling as an investment strategy may allow the focus to shift from buying properties to hold and rent to buying properties that you plan to sell within a shorter amount of time. “Flipping” a house means buying, renovating, and selling the property quickly. This is a common way to prioritize selling as an investment strategy.
However, flipping houses isn’t the only strategy investors utilize to profit from rental real estate. There are investors who will find bargain properties that need only minor updates, and that would be enough to make great rental homes. 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 often be successfully sold as turn-key business opportunities for those searching to include in their investment portfolios without all the hassle of obtaining a property ready to rent. This strategy, of course, will only work if the purchase price is low enough or the market appreciates fast enough to cause the desired return.
Renting as an Investment Strategy
To earn income from real estate is to buy properties to hold and rent. This is another common investment strategy. In general, this approach is viewed as a much more effective strategy for long-term wealth building. This strategy lets investors profit from rental houses in 2 ways: collecting rental income every month and then collecting it when the property will be sold. Keep in mind, the year-over-year gain might not look as big as the proceeds from a sale.
The income generated 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 prevent any severe economic downturns. Buying to hold and rent is probably the best option if you have the time to hold property and favor stability over quick payoffs.
Invest Like a Pro
Maybe the top reason some investors don’t find the buy-and-hold strategy appealing is managing tenants. It is customary that rental homes are managed by property owners, many of whom are not professional landlords and have little property maintenance skills. However, as Nixa professional property management companies have grown and improved, more and more investors are looking to the experts to help them expand their profits. If the only reason you want to sell investment property is that you’re exhausted from dealing with bad tenants, it may be time to hire a professional Nixa property manager to do the job for you.
At Real Property Management Momentum, we make sure 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 417-220-4100.
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