Profitable Pathways: Real Estate Investment Strategies Every Beginner Should Know

Real estate investment is certainly one of the best investments that you can make when considering its long-term gains and potential ongoing income.

Even if it means getting a loan from a bank to build your dream home or even a rental facility, as it can give you the much-needed return throughout the mortgage term.

So while you do have to bear the monthly EMI cost of financing/mortgaging your real estate, you won’t have to pay it from your pocket as such.

In the end, you can start saving a lot of money from day one.

As far as getting its long-term returns are concerned, oh, but there are so many!

Let’s take a quick peek:

Benefits of Real Estate Investment

1. Rental income.
2. Tax savings/benefits.
3. Long-term appreciation.
4. Higher return on investment (ROI).
5. Multiple financing options.
6. Portfolio diversification and risk management.

To leverage these many benefits of real estate investment though, and more in the long run, let’s take a look at some of the best real estate strategies for beginners that you can use:

Key Strategies for Real Estate Investment

• Set your goals.

Have clear investment goals as to what you want to gain from your real estate whether short-term or long-term benefits.

For instance, if you’re looking to build long-term wealth with higher property value or appreciation over time, then renting out a facility makes more sense.

However, should your goal be to have a quick profit or commission, then fixing and flipping the properties might be your best bet.

Likewise, there are several other investment techniques in the highly expensive state of real estate that you can use to meet your investment goals, which we shall shed some light on below.

• Research/Analyze the market.

As important as it is to know your investment goals, having a clear understanding of the market is no less important as it can help you get familiar with crucial factors that play a key role in generating returns.

Things such as local demand, cost of living, pay per capita, other regional economic factors, and infrastructure plans can significantly boost or halt the overall value of your real estate.

To make the most of it, you might want to take a closer look at the historical data of nearby properties and their rental income potential to be in a better place to place your bet.

• Choose your target area/site.

Once you have the ins and outs of your real estate investment goals and the state of the market, you can start selecting a site or property that is most likely to serve your purpose.

Aside from your financial goals, you must consider various other factors such as transportation, schooling, healthcare, shopping, etc. that are most likely to affect the rental income and long-term appreciation rates.

• Manage your funds.

Needless to say, you must have a flexible and adaptable structure for arranging/managing funds, as it can greatly affect the success of your real estate investment.

To make the most of it, you might want to use a combination of sources such as personal savings, traditional loans, help from family and friends, and even private financing from the broker or realtor through some kind of deal.

Apart from the upfront cost, you should also be wary of the operating or maintenance costs as they can vary from place to place.

• Understand the tax and legal implications.

Real estate investors can often leverage various tax benefits in the form of tax savings and other incentives.

These include but are not limited to EMI interests, property tax deductions, depreciation cuts, and other financial benefits.

To further boost the potential return of your real estate investment, you can always consult with a tax professional to see if your property fits any government incentive program.

For instance, the adoption of energy-efficient systems in residential and commercial properties comes with certain tax rebates and subsidies.

• Select the right investment strategy.

Perhaps the most important part of real estate investment strategies is choosing the right type of investment to go with.

Some of the most common approaches that most real estate investors, including seasonal investors, use to make higher returns, include:

1. Buy-and-hold, where you buy and hold a property to make great rental income and an even higher appreciation value.
2. Fix-and-flip involves buying undervalued properties, renovating them, and then selling them at an increased profit.
3. Real Estate Investment Trusts (REITs) allow you to invest in third-party property portfolios and make liquid cash at lower entry costs.
4. Short-term rentals are used to rent out your property for shorter periods to guests and tourists on platforms such as AirBnB, OYO, and so on.

• Maintain your property.

Regardless of which real estate investment strategy you choose, maintaining it to the best of its shape is of utmost importance if you want to make the most profits against your initial investment.

Apart from keeping it in tip-top shape, you should also be proactive in inspecting it from time to time and make sure that it complies with local laws and regulations, to avoid any unnecessary penalties or fines and end up losing any portion of your real estate profits.

At the same time, you might also want to buy an insurance plan for your property to cover any damages in times of natural disasters and accidents.

• Seek ways to generate potential income

Renting out your property to tenants ain’t the only way to generate rental income from your real estate investment.

The modern market allows many other ways of building wealth with your real estate including advertisement, mobile tower installation, ATMs, etc. all of which are enough to give you a stable and regular income.

• Have an exit strategy in place.

While the real estate market is relatively safer than other means of investment, in no way it is out of market fluctuations and trends.

So, no matter how lucrative your real estate investment looks, you should always have a clear exit plan from your investment strategy, whether after the desired appreciation value is achieved or even before (if needed).

That said, to find the best investment opportunities with Shafalya Infra, or to find the best residential property in Ahmedabad, contact us, and we’d be happy to help!