Did you know that the average yearly pay for a real estate investor in New York is $161,675 as of October 2023?
As a real estate investor, you can make some major cash if you know what you are doing. Real estate investing is more than just buying property and becoming a landlord. There are different methods to the madness.
Keep reading to learn about investment strategies you can use as a real estate investor.
Buy and Rent
One of the most common investing strategies for new real estate investors is buying and renting out property. You can buy properties to rent to tenants and manage them either yourself or through a property management company.
A real estate investor could purchase and turn these types of properties into rental properties:
- Single-family homes
- Condos
- Townhomes
Adding rentals to your property portfolio is a great way to provide monthly income and you may receive tax advantages.
Buy and Hold
If you don't want to be a landlord or attract tenants, the buy-and-hold investment strategy might be right for you. This method involves buying undervalued properties and fixing them up.
Many seasoned real estate investors choose to buy a property, fix it up, and earn capital appreciation from it.
When it's time to sell the property, they don't take cash. Instead, they reinvest in another property using the 1031 exchange rule that allows investors to avoid paying taxes on capital gains.
This is a great way to save money upfront on the initial investment. It can take a long time to earn capital appreciation, so this is a good option if you are in the investment for the long run.
Wholesaling
If you have the skills necessary to find undervalued properties, wholesaling real estate might be a strategy you are interested in. It's also important to have a network of real estate investors ready to buy for this strategy to work.
This strategy requires more skills as you need to network both sides, knowing how to buy and sell property.
In short, wholesaling means you enter a contract to buy property but assign the contract to a secured buyer immediately. The contract you sign with the buyer will include the price of the property and the premium for finding the property.
You act as the middle man as a real estate wholesaler so you can charge a 'finder's fee' for finding the property for real estate investors who didn't have time to search.
If you have knowledge about New York real estate and don't want to own real estate yourself, this is a great way to make a profit while extending your property portfolio.
What Kind of Real Estate Investor Will You Be?
Although there are more strategies to real estate investing than buy and rent, buy and hold, and wholesaling, these three are very popular.
If you want to become a real estate investor to make passive income but don't have a lot of knowledge on real estate value and beyond, hire a property management company that can help.
At PMI Paramount, we have 20 years of experience with property management services. Connect with us now to learn how we can help investors like you.
