4 Real Estate Investment Strategies to Grow Your Wealth

Investing in real estate is an exciting endeavor that can lead to significant financial growth. But not only are there different types of real estate properties you can invest in, but there are also a number of strategies you can use when investing.

It's important to know about the strengths and weaknesses of each strategy that you can pursue. From there, you'll be able to determine the best course of action depending on your investment and financial goals. 

Keep reading for the top four real estate investment strategies that you should consider in order to grow your wealth.

1. Buy and Hold

The buy and hold strategy is the most popular real estate investment opportunity because it offers both short-term and long-term value.

Buy and hold means you invest in a property (single-family home, raw land, condo, etc.) with the intention of holding it for the foreseeable future. The goal is to hold onto the property while its value appreciates over time so you can then sell it and get a large return on your initial investment.

This option also offers short-term value because, for example, if you buy a single-family home, you can rent it out to tenants while you're holding the property. Oftentimes, renting out the property will give the investor enough money to cover the monthly mortgage payments (if they have any) as well as some extra money to spend on fixing the place up and managing it.

This strategy is pretty much risk-free because the real estate market grows naturally over time due to inflation and growth of the economy. Even taking into account potential future housing market drops, a home's value will appreciate beyond that.

The only negative to the buy and hold strategy is if you want to rent out your home for short-term income, you'll need to deal with tenants and maintenance of the home, which can be time-consuming and stressful. That's why it's important to hire a property management company that can handle all of those duties without you having to lift a finger.

2. Fix and Flip

If you have money to spend on fixing up an old, worn-down house, the fix and flip strategy might be right for you.

This strategy involves finding a house that is run-down and in need of some serious TLC. But you shouldn't just find any old house. You want to find one that is in a good area with real estate properties in high-demand. If you find a house that is significantly less expensive than others in the area due to it's foundational or aesthetic issues, that would be a great option for a fix and flip investment.

This strategy is best for people who have the money to both purchase the home upfront, and fix it right away. Some houses require a ton of care in order to increase in value. But if you find the right house in the perfect area, you can make a ton of money after fixing it up.

If you're looking to make an investment and get a quick return, this is a solid option. The main setback here is that you have to gamble on the fact that the house will sell for more than what you're spending to buy and fix it. You also have to hope that it sells quickly.

Another setback of this strategy is it's not a long-term investment. You'll get your return relatively quickly, and then you'll want to invest again to keep getting income.

3. Airbnb Investment Property

Airbnb has become a huge force to be reckoned with and cannot be ignored by real estate investors any longer. Airbnb investment properties allow entrepreneurs to potentially make a ton of money each month if they play their cards right.

First, you'll want to buy a property somewhere that has a lot of tourism so there won't be a shortage of people looking to stay at your property. Then, you need to make the property unique and add amenities that are inexpensive but will lead to people willing to spend more to stay with you (snacks, local tips, bikes to use, etc.).

You can literally make hundreds of dollars a night from renting out your property if you do it right and take care of the home. 

There are a few setbacks to this strategy, however. If you're an Airbnb host, you'll need to be a lot more involved than you would with other types of investment properties. Another setback is there can be stretches of time where your home won't be booked for a stay, so you won't make any money. Also, Airbnb takes a chunk of what you make from each booking.

4. Real Estate Investment Trust 

A Real Estate Investment Trust (REIT) is when you pool your money with a group of other investors to buy a piece of real estate. This strategy is generally used for large real estate properties, such as strip malls, office buildings, or apartment buildings. Think of this as something similar to buying shares in the stock market. 

REITs are very passive and you won't need to worry about maintenance or finding tenants. You just have to invest in some money and sell your shares when you think they have the most value. 

If you're looking for the most hands-off strategy, this is it. However, it comes at a price as you probably won't get as much in returns, and it's hard to determine when the best time to sell your shares will be. You also won't be able to make executive decisions over the property, giving you a lot less control.

Real Estate Investment Strategies: Get Help from the Pros

If you're looking for the best long-term real estate opportunity, buying and holding is the way to go. Not only can you make money in the short-term by renting out the home, but the property will appreciate in value over time. 

Are you ready to use one of these real estate investment strategies to grow your wealth? 

Here at Professional Real Estate Management and Investment Services Inc, we will help you find the most valuable properties in the Pinellas County area. We'll also handle all of the property management duties, so you don't have to.

Contact us today to learn more about our services and to start your journey towards a wealthy and fruitful future.

What Are the Different Types of Real Estate Investments?

Real estate is becoming a more attractive investment opportunity for young entrepreneurs across the country, and for good reason. On average, long-term real estate investments outperform the S&P 500 Index.

But if you're interested in property investment, where do you even start?

Well, first you need to understand the different types of real estate investments. Keep reading to learn more!

Residential

Residential real estate is the most popular type of investment, especially for beginner investors. This is because it requires very little effort to own and manage a residential property compared to a commercial or industrial property. This is especially true if you work with a property management company that will handle things like tenants, collecting rent, maintenance, repairs, and quickly filling vacancies.

There are a few different types of residential investment options, including:

  • Single-family homes
  • Duplexes
  • Townhomes
  • Condos
  • Apartment buildings

For beginner investors, it's best to start with a single-family home, as you won't have to worry about managing multiple units or tenants. You can also get a huge return by finding homes for sale with the potential for high long-term appreciation.

Commercial

Commercial real estate refers to properties that are leased to businesses. Commercial investments are vastly different than residential investments and offer a wide range of options.

Commercial investments can vary widely in terms of size, cost, and style. Here are some of the types of commercial investment properties.

  • Office Buildings (for small or large businesses)
  • Retail (strip malls, shopping centers)
  • Mixed-use properties (used for both business and residential)
  • Industrial (warehouses, car washes, storage facilities)

In general, commercial properties are a lot more expensive than residential properties. You also might have more difficulty filling vacancies than you would with single-family homes. That's why commercial property investing isn't recommended for beginner investors. It's best to hold off on this type of investing until you have plenty of experience and have had time to build your portfolio.

Undeveloped Land

Investing in raw, undeveloped land can be a low-risk, high-reward opportunity. The goal of investing in land is to find an area that is low in value now, but you expect to grow in value over time. 

For example, is there an up-and-coming town or city with a ton of free land surrounding it? That might be a good investment. In fact, you might be able to make a fortune off of it.

However, there's always the chance that you invest in land that doesn't gain value, and you won't get any return on it. 

This makes investing in undeveloped land a bigger risk than investing in a single-family home. A single-family home will appreciate in value simply due to inflation and the growth of the real estate market. But you can find bare pieces of land that are priced the same now as they were 10 years ago. 

With this type of investment, it's best to only make your move if you feel confident that you've found a unique and up-and-coming area.

Types of Real Estate Investments: Start with Residential Investing

While each of these types of real estate investments may have piqued your interest, it's best to start with residential investing. Not only is it the easiest route, but you'll be able to gain experience and build your portfolio so you can invest in other types of real estate in the future.

Whether you're looking to invest in your first property, or you're a seasoned investor, you need an experienced real estate management team on your side.

Here at Professional Real Estate Management and Investment Services Inc, we will help you find the best properties to invest in, and we'll take care of all of the managerial duties including finding quality tenants, collecting rent, and routine maintenance. 

Contact us today to learn more about how we can help you with all of your residential real estate investing needs!

4 Important Questions to Ask a Clearwater Property Management Company

Working with a property management company is an integral part of being a real estate investor. A quality property management company will find you the best investment opportunities, market your property, screen tenants, perform maintenance, collect rent, and much more.

But not all property managers are the same. It's important to do your due diligence when looking for a Clearwater property management company to take care of your investment property.

In this blog, we'll discuss the most important questions investors need to ask a property manager before signing an agreement.

1. What Are the Services You Offer?

This should be the first question you ask because you'll find that a lot of property managers don't offer everything you'll need them to. 

When hiring a property manager, you should look for a few key services, which include:

  • Maintenance
  • Rent collection
  • Tenant screenings
  • Minimizing vacancies
  • Investment services
  • Real estate marketing
  • Property inspections
  • Preventing disputes
  • Accounting

All of these services should be included in your agreement with the property manager. Otherwise, you'll find yourself needing to hire additional people to perform those tasks.

Note the importance of your property management company offering investment services. This is a key inclusion because without real estate investment knowledge, they won't understand the local market as much and won't be able to find you the best deals. 

By working with a real estate management company that also offers investment services, they can find you incredible investment opportunities in the area, and then manage those properties for you. The process becomes a lot smoother and you'll save more money by working with the same company the whole time.

2. How Much Experience Do You Have?

In order to be a high-functioning and effective property manager, you need to have several years of experience under your belt. No amount of market knowledge or studying can prepare someone for property management more than pure experience can.

This is because things can go wrong all the time with properties, and knowing exactly how to handle those issues (who to call, how to deal with upset tenants, etc.) is essential.

That's why your second question needs to revolve how much experience your property manager has. If they are fairly new, you need to ask what makes them more qualified than a company that has been doing it for many years.

3. What Types of Properties Do You Manage?

Next up is discussing what types of properties they tend to manage. Some property managers may only work with apartment buildings or complexes, others may only work with single-family homes, and some will work with a combination of both.

It's important to make sure your property manager has extensive experience in managing the specific type of property you own, so you know it'll be a smooth and easy process without any growing pains.

In addition to the type of properties they manage, also ask about how many properties they manage. If they manage a small number of units, it may be due to inexperience or the loss of clients from poor customer service. If they manage a ton of units, your property may not get the attention it needs.

4. What Is Your Fee Structure?

There are a few different ways property management companies structure their fees, and while they each have their own advantages and disadvantages, you need to know which one works best for you.

The first type of fee structure is based on the rent price. This means you and your property manager will agree to a percentage of a rent price which will go to the management company. 

This option is beneficial to investors because it gives property management companies the incentive to charge higher rent, which means more money for the investor.

Another popular fee structure is the flat rate, which means you'll pay the property manager the same amount, regardless of what the rent charge is. This can be beneficial because it prevents the investor from having to pay the property manager more money if the rent increases.

You should also inquire about what their monthly rate includes. Is it all-inclusive or will you have to pay extra if there is maintenance to be done? Or will you have to pay a vacancy charge if no one is renting the property? 

These are important questions to ask because oftentimes property management companies will offer low base rates but they won't be all-inclusive, meaning you'll end up spending just as much or more every month with all of the additional charges.

What to Look for When Hiring a Clearwater Property Management Company

By asking the above questions, you now know exactly what to look for when hiring a Clearwater property management company. 

No one in the Pinellas County area hits all of those marks better than Professional Real Estate Management. Not only do we provide top-of-the-line investment services, but we offer the best property management services in the county. 

Give us a call today to learn more about how we can help make your investment dreams into a reality.

A Beginner's Guide on How to Get Started in Real Estate Investing

Do you have dreams of one day retiring without worrying about your finances? Do you want to earn a passive income instead of dealing with the everyday 9-5 work grind?

If yes, then real estate investing might be the answer to all of your hopes and dreams. 

But investing in real estate isn't as simple as you might think. There are a lot of factors to consider, and the more research you do, the better off you'll be as an investor.

Ready to learn the basics of how to get started in real estate investing? Keep reading for what you need to know!

Consider Your Financial Standing

As with any major investment decision, it's important to take a close look at your financial standing. You'll need to determine how you will pay for the real estate investment and what you can afford without digging yourself into a deep hole.

While some people may be in a great financial position and are able to pay for their investments upfront without taking out a mortgage, that's not usually the case. You'll likely need to take out loans in order to invest in real estate, at least in the beginning.

You need to figure out how much you can afford to pay for a downpayment and what you can spend each month on mortgage payments. If you need help with the downpayment, consider going in on the investment with a partner.

Keep in mind, you will be making money off of renting these properties out, so that will help with the monthly mortgage payments and other expenses like property tax. 

Figure Out What Type of Property You Want to Invest in

The next step is to figure out the type of properties you want to invest in. Do you want to invest in a single-family home? Do you want to buy a few townhomes to rent out? Or does investing in a commercial building sound more appealing?

This determination needs to happen early in the process because there's a big difference between investing in a commercial building and investing in a single-family home. 

For beginner investors, your best bet is to start with investing in a single-family home or a townhouse. It'll be a lot easier to manage and is a less risky investment.

Determine an Investment Strategy

If you're just getting started in real estate, you probably didn't know there are a ton of different strategies for investing in real estate. And it's important you have a clear-cut strategy before you make your investment. 

Here are some of the most popular real estate investment strategies you should consider:

  • Buy and Holds
  • Fix and Flips
  • Airbnb Properties
  • Real Estate Wholesaling
  • Commercial Real Estate Investing
  • Passive Investing

The most popular of these options, if you're looking for long-term returns, is the buy and hold strategy. This means you purchase a property, rent it out to pay off the mortgage and other expenses, and get a big return on the long-term appreciation of the property value.

It's important to reach out to a local real estate company that can find you the best deals that'll earn you the highest return in the long-run. 

Find the Perfect Location

If you're investing in real estate with the simple goal of getting a return on your investment, then you can't really go wrong no matter where you invest. Property value increases over long periods of time across the board. This is due to a few factors including long-term economic growth and inflation. 

But your goal shouldn't be to simply get a return on investment. It should be to get the biggest return on investment that you can. You should look for a location that is a low-risk, high-reward investment. 

Areas with up-and-coming neighborhoods, good schools, quality restaurants and places to go out, and unique geography indicate that it's a good area to invest in. 

If you can find an area that checks all of these factors and shows positive economic trends, then it's definitely worth a closer look.

Build a Team

Your work doesn't end once you find the perfect investment property. You'll now need to figure out how you're going to manage the property. 

You'll need an electrician, plumber, handyman, home inspector, HVAC professional, yard service, and pest control. That's a lot of people you'll need to have on-hand, which is why smart investors decide to hire a property management company, instead.

A property management company not only handles the day-to-day management of your properties, but they also find quality tenants and ensure that there are no prolonged vacancies.

With a property management team on your side, you won't have to worry about finding a plumber or electrician in an emergency situation because they handle all of that for you. You won't have to deal with tenants or be on-call 24/7. If you're looking for a truly hands-off real estate investment experiences, then a property management company is a necessity.

How to Get Started in Real Estate Investing: Work with the Pros!

Now that you know the basics of how to get started in real estate investing, it's time to work with the people who know the ins and outs of investing in real estate. No matter how much research you do on your own, it can't replace the decades of experience that the professionals have.

At Professional Real Estate Management and Investment Services Inc, we will not only find you the perfect investment property, but we'll handle the property management, as well. It doesn't get much easier than that!

Ready to get started? Contact us today so we can help you find exactly what you're looking for in a real estate investment property.