When you think of investing that makes a lot of money, what comes to mind? Stocks, forex, crypto and mutual funds? If you’re like most people, you probably don’t think about real estate as an investment type that the most rewarding. But hear us out! Real estate can be a very rewarding investment.
Many people are interested in becoming involved in active investments, but they don’t know where to start. Active investment generally refers to an investment strategy where the investor is actively involved in the management of their investment.
Keep reading to discover more about 3 types of exciting active real estate investments!
Fix and Flip
Active investments can include anything from building homes to rehabbing properties. Fix and flip investing is one type of active investment that has become increasingly popular in recent years.
If you’re looking for a short-term investment with the potential for high returns, fix and flips might be right for you. In a fix and flip, you buy a property, make repairs or renovations, and then sell it for a profit. The key to success in fix and flips is to buy low and sell high. That means finding properties that are undervalued and in need of repairs. With the right property and a little bit of elbow grease, you can make a tidy profit on your investment.
Rental properties are another active investment opportunity for investors. By actively managing a rental property, you can maximize your return on investment (ROI). There are a number of things you can do to make your rental property more attractive to tenants and increase your profits.
Rental properties can provide steady income and long-term appreciation. When you own a rental property, you collect rent from tenants every month. This rent can cover the mortgage on the property while leaving you with extra cash flow each month. Over time, the value of your property is likely to increase, providing you with even more equity. And as long as you maintain the property and keep your tenants happy, you can continue to collect rent for years to come.
Wholesaling is all about negotiations and generating revenue fast. Most investors who use this form of investment do it full time and it can get rewarding once you start scaling. Wholesaling happens when you buy a property at a “wholesale rate” and sell it quickly for a little profit.
You start making big money when you have multiple deals happening at the same time and that’s why investors are fully hands on.
If you go down this route, expect yourself to be either hunting for cheap properties that you can buy or looking for potential clients who will buy the property of your hands at a higher rate.
So, what’s the best type of active real estate investment for you? It all depends on your goals and risk tolerance. But these three types of investment should give you a good starting point.