Creative Strategies to Maximize Real Estate Investment Gains

Real Estate Investor

Real estate investment

Real estate investors are always on the lookout for the most profitable opportunities, whether it be renting out properties or flipping houses for resale. While it is undeniable that these proven strategies offer great potential, it often pays off to think outside the box and look at properties from different standpoints. Here are four creative, long-term strategies for new and seasoned real estate investors, as outlined in a Forbes article.

  1. Buy a single-family home on a lot with multi-unit zoning

If you are considering buying a single-family home, take zoning into account. By purchasing a single-family home that sits on lot zoned for multi-family development, you can reap more benefits in the long run than meets the eye. For example, you could rent out the home for income until you have the wherewithal to raze the house and build a multi-unit property in its place. Alternatively, you could sell the home to another developer who might be interested in building a multi-unit property on the lot.

  1. Buy a multi-unit property near an area marked for development.

When plans for a new development such as a commercial district are afoot, a planning permit will be posted long before the building permit is issued. Keep your eyes out for these advance notices on your county’s website and search for multi-unit properties in the vicinity of the new development. Once the new development is near completion, you can expect your rental rates to rise significantly as the demand for the area increases – even if you don’t update the units.

  1. Buy parking lots during the economic downturn.

With the shift to remote work due to the pandemic, the value of parking lots in downtown areas have dropped. This is a good time to purchase a parking lot at a reduced price. As more people get vaccinated and the commute to downtown areas picks up steam, you can expect higher returns on investment (ROI) from such a deal. Not only do parking fees in high-density zones provide steady income, but the lot also has a high resale value for potential developers.

  1. Buy a single-family home near a university with zoning to build an ADU.

Pay close attention to the zoning regulations and consider purchasing a single-family home that allows the possibility of building an additional dwelling unit (ADU). This is especially appealing in properties near colleges and universities, as buyers may derive income from these secondary housing units. Many families buy an investment property with an ADU near their child’s college so the student can rent out the space and offset their expenses.

Are you ready to invest in real estate and see the value it can provide? RLG would love to help you! Call us today to learn more!

4 Habits Successful Real Estate Investors Share

Real Estate Investors

Real Estate InvestorsNot long ago, it seemed as though an entire generation had been doomed to live out their adult years paying rent. Millennials were often portrayed in the media as a generation of renters. Other outlets spoke of the housing crunch affecting millennials in rather striking terms and likened the debate around housing policies to “generational warfare.”

While rising home prices still present a formidable challenge to the cohort of young adults – especially in larger urban areas – more and more millennials have taken the jump toward homeownership in the last few years. A 2021 report by the National Association of Realtors on generational real estate trends revealed that millennials currently make up the largest group of homebuyers at 37 percent.

The allure of homeownership comes from the fact that owning a property is one of the fundamental ways of accumulating wealth. In addition to the amount of equity you accrue as you pay down your mortgage, cash flow is a key part of the equation when it comes to building up a stronger financial future. That’s where real estate investing comes into play.

The benefits of investing in real estate include passive income, stable cash flow, tax advantages, and more. If you are ready to jump on the real estate investing bandwagon and take advantage of the current low mortgage rates, make sure you have a game plan in place that will set you up for success and pave the way to financial freedom. Here are four habits successful real estate investors share:

  1. Build Credit

Before you get started in real estate, make sure your finances are in good shape. There is no easy answer as to what credit score you need for a residential or commercial investment property loan as credit requirements can differ greatly among lenders and are based on numerous factors.

As is the case with other loan types, a good credit score will help you secure lower interest rates and more favorable conditions that might require little to none of your own cash up front. Another key factor lenders will look at is debt-to-income ratio (DTI). Your DTI is all your monthly debt payments divided by your gross monthly income. With a lower DTI and the income to support it, you are able to qualify to borrow a larger amount of money.

  1. Make a Plan

Figure out what your short and long-term goals are and solidify them into a business plan. The investment model best suited for you really depends on why you are in real estate investing and for how long you plan to keep the property. Some people may be eyeing passive income, while others have a goal to invest for retirement. Setting your goals from the outset will allow you to zero in on the type of property you should invest in.

  1. Develop a Niche

When you develop and invest within your niche market, you are better able to outperform your competition and secure superior deals as you can target your audience more efficiently and identify pain points to minimize your risks. Once the investor has dominated a particular niche, they can then move on to other niches using the same in-depth approach.

Single-family or multifamily homes, retail or office buildings, industrial or commercial properties, mobile homes, land, student housing, and short-term rentals are just some types of assets you could potentially invest in.

It bears mentioning that a focus on a niche does not necessarily mean being confined to a single location. Make sure that the numbers make sense for you, whether it be investing in smaller cities where prices are lower or in large metropolitan areas.

  1. Invest Now

The current low interest rates make it the perfect time to start investing in real estate. In addition, home prices are expected to continue to rise throughout 2021 for various reasons, one being a bullish stock market.

Are you ready to invest in real estate and see the value it can provide? RLG would love to help you! Call us today to learn more!