Income Artist

7 Must-Know Real Estate Investment Strategies For 2023

Author: Jimmy Barron
Published:April 2, 2023
3 mins 54 secs

Real estate investing is a strange, but incredibly exciting world. However, if you try to begin investing in real estate without the right strategy (or strategies), you’ll be lost in no time.

For this reason, there are seven must-know real estate investment strategies everyone should know about in 2023:

1. Flipping Properties

Flipping involves making quick sales of renovated homes afterward.

While the flipper continues to make mortgage payments until the house is sold, success in flipping is determined by the profit the seller makes over the purchase price and how quickly the property is sold.

Flippers look for purchases that are below market value, make enough modifications to significantly increase the price, then sell the homes rapidly.

If the flipper can make significant renovations while keeping expenditures in check, a distressed property can be the most enticing.

A system is in place for successful flippers, including easy access to low-cost materials, a crew that can complete work of a high standard for a reasonable price, and a real estate agent who can sell a house rapidly.

2. Real Estate Wholesaling

Similar to house flipping, wholesaling entails purchasing properties at a discount and selling them straight immediately.

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The distinction is that if any, repairs or alterations are made by you. So, you only own the property for a little period.

Because it involves little to no capital, wholesaling is a wonderful method to start off in the real estate investing business.

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Distributors usually have a network of other investors who want to acquire cheap, distressed homes and have access to cash for quick deals.

The key factors are your abilities in scouting, marketing, and bargaining. You might find wholesaling to be fairly enjoyable if you enjoy doing research and selling.

Hard money lenders can also prove to be highly useful when using the real estate wholesaling method. 

3. Short-Term Rentals

As you are aware, STRs are homes that are rented out by the hour, day, or month.

Due to the abundance of STR rental sites and apps, and other booking platforms that make it simple for modest homeowners to connect and advertise their rental units online, their popularity has increased dramatically over the past ten years.

It’s one of the most profitable real estate investment ideas that are currently accessible to almost everyone.

This tactic would be most effective if your property were situated in an area with a lot of tourist and commercial activity as well as lax laws governing short-term rentals.

Because STRs require more amenities, furniture, and routine upkeep, operating an STR typically entails higher costs and maintenance.

It would require a lot of your time and work if you choose to self-manage your rental property.

4. REITs

REITs, or real estate investment trusts, are businesses that operate as mutual funds for real estate investors, enabling them to invest without actually owning any real estate.

Similar to buying stock or mutual fund shares, investors buy REIT shares, and the trust distributes dividends to its stockholders.

To allow individuals to engage in large-scale, income-producing real estate, Congress created REITs in 1960.

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All dividend payments made to shareholders are deductible by REITs from their taxable corporate income.

5. House Hacking

House hacking is likely to be one of the less familiar terms on this list for those who are just starting out with real estate investing.

Simply put, house hacking is renting out a portion of your residence. It might be a guest room, the attic, or the cellar.

Perhaps you may purchase a multi-family building and live in one unit while renting out the others.

By living in your investment home and collecting enough rent to pay your mortgage and living expenses, you make money.

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6. Buy/Rent Strategy

When you buy and rent real estate, you purchase homes that you can either manage yourself or by hiring a property management firm.

The majority of real estate investors buy single-family homes, apartments, or townhomes to rent out.

Make sure there is enough profit in the rent you can charge to produce a positive cash flow by conducting research in the neighborhood to find out what most tenants want.

7. Crowdfunding

A real estate investment plan that is crowdfunded brings together investors with similar objectives and concepts.

To communicate with property developers and other investors, you employ a real estate investment platform.

The real estate platform screens the investment opportunities so you can assess the risks and select the investment that is best for you.

Crowdfunding can provide the solution you’re looking for if you’re wondering how to invest in real estate on a tight budget.

The more effort you put into the crowdfunding launch, the more likely you’ll be to succeed while using this nifty strategy.