A real estate investor without a property investment strategy is like a ship captain without a compass. A property investment strategy acts as a guideline on how to invest and what to expect. Selecting an approach is not easy, given the related pros and cons. There are investment strategists who can support you in analyzing and selecting the best strategies. This article highlights some strategy solutions that property investors can pursue.
Buy and hold strategy
The rationale behind buying and holding strategy is the argument that property tends to appreciate with time. Thus, using this property investment strategy, an investor identifies a prime property, buys it, hold on to it, and sells later at a higher price. While this is a low-risk approach for long-term profits, success depends on property appreciation and ability to wait.
Positive and negative gearing
These two strategies are related to the buy and hold strategy. In positive gearing, one can build a cash flow portfolio. The property investment strategy involves buying a property where the cash flow returns surpass the property loan expenses. You can invest the net surplus in other portfolios. However, in negative gearing, the cash flow returns are less than the loan expenses. Either way, such properties earn you some returns, which reduces the cost of acquisition as you wait to sell in future.
Buying new off-plan properties
This property investment strategy involves purchasing a house that is about to be built. Purchasing a new property may save you in tax deductions. Besides, off-plan properties give you room to negotiate with the developer and space to upgrade house features. However, delays in completion may postpone your investment plans. Also, the property value may decline from the time a financier valued the property.
Renovate and hold vs. flipping strategy
In renovate and hold strategy, the investor buys a property, remodels it to sell in the future. A renovation property is cheaper than a new one, and renovation increases rental incomes. In comparison, flipping property means renovating an old property and re-selling it for profit. While both methods can net profits, they are expensive and time-consuming.
Proprietary investment strategists
A proprietary investment strategist supports an investor to navigate through the pros and cons of property investment strategies. These professionals have knowledge and experience working with various property investment strategies, which allows them to provide personalized consultancy. As a result, they work hand-in-hand with clients to ensure they achieve a return on investment through strategic buying. Also, a proprietary investment strategist helps the client build a property portfolio while maintaining regular cash flow.
After deciding to invest in the property market, you must decide how to invest. A proprietary investment strategist will help you select the best strategy solutions that maximize returns and reduces risks. Contact a company that offers proprietary investment strategy solutions to learn more.