As one of the most secure investment areas, real estate is currently making more money for more people than almost any other area of investment. All you really have to do to see this is watch some TV, you will see any number of Realty Flip shows or get rich schemes that are based on purchasing property.
While most of these schemes are just that, the truth of the matter is that real estate makes money. In recent years real estate has made more increases than any other investment, and this trend is continuing. The current market is on Fire! Smart investors continue to put their money where they know it will grow.
When investing in real estate one needs to make some important decisions before the purchase is ever made. You will have to decide if you are going to be a landlord or simply flip homes. Being a landlord can be a rewarding undertaking. Remember that in being a landlord, one must deal with the negative aspects of the job. Dealing with tenants, collecting unpaid rent or having to fix things regularly can weigh heavily on a homeowner so don't choose the landlord route unless you are sure you can do it. If you choose to flip homes, then be sure to have money set aside for the renovations that you will no doubt want to do. Make sure you have a proper estimate of repair costs and especially make sure to use a good local realtor to give you an accurate ARV (After Repair Value)
This is the easiest way to ensure that you see a good profit on your investment. In flipping homes, try to pick ones that are going to be easy to fix up By easy I mean cosmetic repairs.....New flooring, paint, new kitchens and baths etc......NOT huge repairs such as foundation, mechanical systems etc.. Location is also very important at this time, as a good location alone can sell a home. Purchasing homes in and around major commerce center or education district is good practice as these homes usually go for premium rates. Try to avoid homes that need extensive repairs or upgrades. These can cut into your profit margin and take precious time that could be better utilized by having the home on the market. Be sure to assess the risk involved with flipping a home. The renovations that you make must be able to justify the new asking price, so be careful and plan accordingly.
Both routes are a great way to wealth but very different. Flips are a great way to make quick Equity and create some working capital. Buy and hold is a longer game and will also create equity through mortgage pay down and appreciation. I currently use both models along with Rent to owns to create my business model.
David Giovanniello is the Author of the book: "The Warren Buffett Approach to Sell Real Estate and also Founder & Host of North London Advice Givers™ Podcast and Editor-in-Chief of North London Advice Givers™ Magazine—a monthly print-publication, featuring London experts, entrepreneurs and thought-leaders. He is also, CEO of North London's Teacher Only Program® and is a licensed real estate agent with Century 21 First Canadian Corp. Brokerage. David has been called "provocative and entertaining," but also, "a committed philanthropist." He is praised for his Mission to raise/donate over $10,000 to local and Teacher-related charities each year. David also supports many great national charities too, such as: United Way London & Middlesex, Muscular Dystrophy, Canadian Red Cross, MADD: Mothers Against Drunk Driving, Jr. Mustangs Hockey Team Sponsor. Plus, with his "Free Book 4 Charity" campaign, he hopes to raise another $25,000 annually from the $5 (minimum) donations, of paying it forward