Finding a good return on your investment is the primary objective for people that are looking to invest. And investing in real estate is similar.
Most people think investing in real estate is only for the rich, but that’s false. Real estate investing could be costly if you don’t know what you’re doing or don’t work together with residential property conveyancing lawyers, but for an investor willing to explore different avenues to invest and make some money through real estate. For more information, click here: Lloyd Edge Buy Now book.
Different Avenues For Real Estate Investing
If you’re exploring getting into real estate as an investment opportunity, it’s critical to consider owning and renting it as a business.
You want to treat your investments like any other business, meaning you would need to create a business entity, have a budget in place, and continue to strategize how to grow your investment(s) unless you’re thinking of your real estate as a source of passive income.
If you’re going to treat your investments like a business opportunity, you need to get a business license and tax ID, but most importantly, you need to create a business plan.
A business plan is a detailed outline of the goals and objectives you have for your business, its potential for growth, and the steps you plan on taking. Also, your business plan should address the customer needs and objectives you may have to address them.
With real estate investing, you have plenty of avenues to explore. You could consider the following;
- Fix and Flip
- Wholesaling real estate
- Buy and Hold
- Rental Properties
Fixer-Uppers: A fix and flip are when you buy a property, usually below market price, and contribute some money into renovating and making improvements that will increase the resale value of the real estate.
Wholesaling: Wholesaling real estate is a newer way to get into investing in real estate. In a typical deal, a person agrees with a seller to buy a property either by cash or financing and take possession of the property.
With wholesaling, the investor would look for a property below market value. Instead of taking possession of the property, the investor acts to broker a deal between a motivated seller and a secondary buyer.
Every state has different requirements and regulations regarding wholesaling, so if you’re in California or Texas, you can do a Google search to determine the validity and legality of wholesaling in your state.
For example, a Google search like is wholesaling real estate in Texas legal? You’ll find answers that range from a simple yes to yes, but only if done correctly.
Holds: Buy and hold is the most popular strategy that people that choose to use real estate as an investment opportunity will take. In a buy-and-hold, an investor buys a property and holds it some time down the road where the property’s value has appreciated for a sizable profit.
Rentals: Rental properties are the second most popular form of investment vehicle using real estate. In this strategy, an investor will buy real estate and rent it out to make a monthly profit.
Some states, like Texas, make rental income tax-free so owning property in Texas is highly attractive for investment opportunities. Also, since Texas has an overly business-friendly climate, significant industries house their businesses in the state.
Some Fortune 500 companies that house their businesses headquarters in the State of Texas include;
- Sysco
- American Airlines
- Exxon Mobil
- AT&T
- Kimberly-Clark
- Texas Instruments
- Tenet Healthcare
With employment opportunities and low living costs, including no income taxes, real estate in Texas is an attractive investment opportunity.
To get started and be sure that you can position your investments to succeed, you need to create a business plan that outlines your objectives, how you plan to achieve them, and who your potential customer is.
Create A Business Plan
When designing your business plan, there are a few mistakes to avoid, such as;
- Bad, unclear writing
- Poorly defined goals and objectives
- Incoherent strategies and Incomplete planning
- Unrealistic expectations
Instead, an excellent real estate business plan will outline your values and mission statement, break down your goals into short, and long-term objectives; formulate an investment strategy and budget for you; show how you will get financing; explain who is working for your business; answer any potential what-ifs or detail a system for overcoming them.
