Like the other business sector, the strategies in real estate business changes from one to another. The strategies you used in the previous year will not be suitable in this year. Instead thinking of using the same strategy that brought you success last year, you should use a proactive business strategy that brings success in the present year. You can develop your own strategy that is effective for today’s marketing conditions.
Investing in Real Estate is not an easy job where you must have a thorough knowledge of the real estate business. The number of house flipped in this year may be higher than the last year the small changes in the market trends has altered the strategies used in the flipping properties.
There are many real estate investors in the market and you must use the right strategy that is aligned with the present market trend to sustain an edge over the competition. Following the right strategy changes your world in terms of profit you can earn. There are many ways to earn a profit in real estate business rather than just investing in properties. Some people feel that choosing the real estate deals is an easy option than investing in stock options.
The three main real estate strategies that you can follow to make money in this sector are Flipping, Buy and Hold, Wholesaling. The flip model is called by some people as ‘Buy Low and Sell High’ approach. In this, the investor buys a property at discounted price, make some improvement and sell it for the profit price. The single family home is the best choice for flipping. You must remember that the main thing you need to follow in flipping is the speed. You must resale the house as quick as possible so that maximum profit is assured. Otherwise, you need to spend more money on carrying cost like utility charges, condo fees, property tax etc.
As the name suggests, in the Buy and Hold you should buy a property and hold it for a particular period. You can rent the property and generate monthly income or just hold the house till you sold it to another person. The benefit in this strategy is earning the monthly income ease your problem of paying monthly interest on the amount borrowed for acquisition of the house. After some period, the principal balance reduced and the equity value increased.
In the wholesaling approach, the wholesaler never holds the property instead holds the property right by making a contract with the seller and sells the contract to another person. The difference between the selling price and buying price of the contract is the profit for the wholesaler. You can either sell the house to retail buyers or to cash buyers. When you sell it to cash buyers, you can get your commission payment within some days or weeks. You don’t want to invest any amount in this strategy, unlike the previous models. You should make a contract with the seller and sell it at a higher price to the buyer and earns money.