Cashflow or Capital Growth are the two general directions we can choose from. The rest are like sub strategies that are more related to your personal interests and desired level of involvement. Value add, reno and hold, set and forget, hotspot hunting, short term rentals, flipping, developing, land banking, commercial and syndicates.
Cashflow
Accumulating high cashflow properties that produce profits from the rental return alone. High cashflow properties usually come at the cost of lower capital growth.
Capital Growth
High growth properties are located in areas with high owner occupier appeal, the growth is fuelled by emotional home buyers. Buying and holding capital growth focused properties usually comes at the cost of a lower rental return.
Reno and Hold
Force up the property's value. Manufacture equity immediately, while also increasing the rental return. This equity can be re-financed out to fund more purchases or can be left in the deal as a buffer.
Set and forget
Buy higher quality, low maintenance property with the minimal effort and involvement required.
Hotspot Hunting
Crunching the numbers and sifting through data to identify a market you believe is next to take off.
Short term rentals
Holiday homes leased for short stays on places like Air BnB.
Flipping
Adding value through renovation and selling within a short timeframe of the purchase date.
Developing
My definition of developing is to create new. Create a new building or new block(s) through subdivision.
Land Banking
Buying parcels of land in areas you expect considerable growth and waiting for that to happen. It may occur through a zoning change or expansion of a city/town.
Commercial
Commercial property has its own set of rules. Finance and leases are quite different from residential. The commercial banner covers a wide variety of industries and property types; industrial, retail, office, development sites, hotel and leisure, medical, farming and rural.
Syndicates
Pooling funds together with other investors to take on bigger real estate projects. You can split the workload or have a group of professionals execute the project on your behalf.
Wholesaling / Options
Wholesaling is a more common strategy in America. In Australia it's better known as options trading but still not a well-known or commonly used tactic. It's the process of securing a property at a certain price and then finding a buyer at a higher price before you complete the transaction, so the property never goes in your name and you don't have to come up with the financing for settlement. You secure the option to buy a property at x price with x terms and then sell that option to another buyer.
Did I forget any? Reach out if you think any other strategies should be added to the list.
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