Investing in real estate is a great way to create and protect wealth. Real estate is tangible and can deliver cash flow, appreciation, leverage, diversification, and tax benefits. These tried-and-true perks have stood the test of time, helping ordinary families to become millionaires for generations. And even if you don’t have a passion for real estate, you might be surprised to learn that there are a multitude of investment strategies to fit your goals and preferences.
In fact, there are so many strategies for investing in real estate that some investors struggle to figure out where to start. It’s kind of like being a kid at DQ or Baskin Robbins, trying to figure out which flavor of ice cream you want. All are filled with sugar and cream, but your particular palette may prefer something with crunch, something rich, or extra sprinkles. With investing, it comes down to how active you want to be in the investment, interacting with residents, and the use of the property.
And even if you prefer the familiarity and simplicity of vanilla, it never hurts to glance at some of the other options. To help you consider your full menu of options when it comes to investing in real estate, here are 26 investing strategies to consider for your next deal.
Placing a property under contract and assigning it to another buyer for a higher amount or an assignment fee.
Buying a property, fixing it up, and then selling it in a short period of time — usually within 3–12 months.
Acquiring a property and leasing it to a resident for monthly income.
4. House Hack
Buying a property to live in and renting out the other spaces. Usually for two- to four-unit properties.
5. Residential Multifamily
Investing in a building with two to four apartment units.
6. Commercial Multifamily
Investing in a building with five or more apartment units.
7. Short-Term Rental
Renting out a furnished property for less than 30 days.
8. Vacation Rentals
Similar to short-term rentals, these are typically targeted at tourist locations.
9. Turnkey Rentals
Buying a recently rehabbed property with a property management company in place.
10. Private Lending
Loaning out funds to private investors for a specified return.
Real Estate Investment Trusts are publicly traded companies that invest across a portfolio of assets, offering shares to investors.
When a group of investors owns a property, where some members are active (general partners), and others are passive (limited partners).
13. Lease Options
Leasing a property with the option to purchase the property from the owner.
14. Fund of Funds
Creating a fund to invest directly into other real estate funds.
Purchasing the loan on a property so you become the bank and borrowers pay you.
16. Tax Lien Investing
Buying the delinquent tax lien on a property and earning profits as the property owner pays interest on the certificate.
17. Raw Land
Acquiring undeveloped land to hold or sell for future development.
18. Mobile Homes
Buying and renting mobile home units.
19. Mobile Home Parks
Acquiring the land which is zoned for a group of mobile homes and charging rent for use of the land and utilities.
Owning commercially zoned storefronts used to sell products or services.
Triple net lease properties are where an investor owns the building, but the tenant is responsible for all repairs, maintenance, utilities, taxes, and insurance. You often find this for large corporate tenants such as banks, fast food restaurants, and drug stores.
Investing in buildings that focus on product production and logistics such as warehouses and factories.
A building where companies meet and conduct business.
A facility to rent space to individuals to store their personal or business belongings.
25. Hotel Investing
Buying and managing hotels focused on short-term accommodations.
Buying and managing venues with short-term accommodations, plus an elevated experience for guests.
Certainly, there was at least one strategy that caught your attention, but you still may come back to your flavor of familiarity. If you want to learn more on any topic, be sure to check out the Best Ever Show archives. With over 2,500 episodes, there is a wide range of topics to cover your investing needs.
About the Author:
John Casmon has helped families invest passively in over $90 million worth of apartments. He is also the host of the #1 rated multifamily podcast, Target Market Insights: Multifamily + Marketing. Prior to multifamily, John was a marketing executive overseeing campaigns for Buick, Nike, Coors Light, and Mtn Dew: casmoncapital.com
Disclaimer: The views and opinions expressed in this blog post are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action.