What are the best real estate investment strategies to use in 2018?
There have been some subtle shifts in the US real estate market over the past year. Investors, analysts, buyers, and owners are still split on where they think the market is heading over the next 12 to 36 months. Most forecasts call for continued moderate growth through 2018, but as always; real estate performance is local. So, what investment strategies may be right for you now?
Fixing & Flipping Houses
Rehabbing and flipping has become and remains fashionable thanks to a variety of TV shows. Though just because it is trendy, doesn’t mean that it isn’t still a great way to get involved in real estate. There is still a lot of profit to be made from flipping houses. Over $60,000 on the average flip according to RealtyTrac. There will always be distressed property owners and sellers who are motivated to sell, and properties are always aging. These are all opportunities to serve and profit through renovating, repairing, and repositioning. If you can find ways to add value, you can create a great income from flipping just a few houses each year.
Real Estate Wholesaling
Wholesalers may be the number one, most in-demand business or job in 2018. Wholesalers are masters of finding discounted property deals, and connecting end buyers to them. One of the biggest challenges for investors and home buyers over the past few years has been access to deals. Inventory has been carefully throttled, creating bidding wars, and heated competition over homes for sale. Some areas have been seeing more new construction, but still, the ability of house flippers, rental property investors, and regular home buyers to succeed all relies on being able to find properties to buy.
This is where wholesalers come in. Real estate wholesalers find and serve the deals to others. It is also considered the lowest risk strategy, easiest to get started in, and yet, has some of the best ability to scale.
Rental Property Investing
Off of the ‘reality’ TV screen, rental property investing has probably been the biggest trend among real investors over the past few years. This is partly due to the awareness of how important passive income is, as well the presence of opportunities, and how many investors began regretting selling off their assets in 2008.
With good property choices, with solid numbers, and excellent management, rental property investing can be highly profitable, provide for an early and comfortable retirement, and can both protect and growth wealth.
Key to succeeding in rentals is finding the wholesale deals, and accurately gauging property management needs. Will you go the DIY route and self-manage, or does it make more sense to use a turnkey service so you get truly passive income?
Private Lending
Private lending is a real estate investment strategy which has only really gained awareness in the last 5 or so years. It has gained a great deal of credibility, thanks to notable publications like the Wall Street Journal, and proving performance for the individual investors who have tried it. It has also solved a great need for individuals who have desperately needed to achieve better returns on their savings and retirement accounts, while filling a significant demand for real estate financing.
Private lenders use their capital to bypass third party institutions, and make loans directly to borrowers and investors who are wholesaling, flipping houses, and acquiring rental homes. That gives them a much larger share of the profits, and consistent streams of passive income. Others are participating by investing in existing mortgage notes with high yields.
Summary
Whichever direction you think the market is going in, or level of engagement you want to have in your investments, there is a strategy that fits. If you already have capital you may become a private lender. If you need to generate cash fast, consider wholesaling. If you love the idea of creating beautiful homes, or helping others with safe and affordable housing, try flipping or rentals. What will you do?
