May 30, 2018

Do you dream of a vast and flourishing real estate realm that brings opulent spoils to its supreme ruler, your majesty? Well, I would encourage you to think big, but do not get ahead of yourself. Real estate investing can be a great business endeavor, yet the success does not come easy. You need money to make more money and knowledge to recognize real opportunities. Also, you want to build your empire on strong foundations, from the ground up, and brick by brick. That is the only way to repel invasive forces, be it a market bubble, competition, plummeting prices or anything else.

Strategic Approach

People buy and rent property largely based on emotional sentiments. They want a home that instantly strikes a chord. On the other hand, property hunters and house flippers prefer cold calculations. So, what is your target clientele and main objective? The main dilemma is this: do you buy and hold or fix and flip? In the first case, you aim at long-term, recurring profits that stem from rental income. The other strategy involves finding sound targets for flipping and achieving quick, big gains. The former proposition may seem more tempting; however, it requires constant work because the income is not passive.

Proper Targeting

When it comes to certain types of properties, they make more financial sense to flip. Others are more suitable for the hold-it-and-rent-it strategy. This is to say that you have to determine the type of property that fits your investment plans the best: condos, single-family homes, duplex and triplex buildings, etc. At the same time, one crucial thing to note is that you can combine the two main tactics for an amazing effect. For instance, take a bit more risk. Take a loan and flip houses. This is a prudent tactic for those who want to ramp up capital and buy long-term rentals later. Of course, it is also possible to keep flipping your way to copious heights.

Building a Royal Treasury

It goes without saying that without financial means, your grand dreams will crumble before you. If you lack resources in this department, you probably seek to acquire them via wholesale, which is not easy. It takes a lot of hard work, perseverance and dedication to reach your goals. Most notably, you have to get familiar with direct marketing and methods of wholesaling market properties. So, identify your financing needs and sources. Once you obtain ample cash, you start holding or flipping. Get clear on what you want and where your strengths lie. Make an informed decision after you weigh all the pros and cons.

Gold Standards

To strike gold, you also have to target buildings that are likely to rise in value. This is mostly speculation, as predicting market prices with absolute certainty is a borderline impossible. Still, it always helps to revise the principle that in the world of real estate, location is everything. Try to pick an up-and-coming neighborhood with a ton of potential. You might want to go for one which features high rental demand from well-paid professionals. It is also preferable that it has parks, cultural amenities, shops, markets, libraries, etc. Finally, keep close eyes on the development and large infrastructure projects in the area. These favorable winds tend to push the prices up.

The Frontier of Innovation

Keep up with real estate trends and goings-on. Set your eyes to the future. One of the most prominent developments in booming markets like urban Australia comes in the form of green buildings. Bustling cities breed a whole ecosystem of professionals who drive growth in this sector. We have, for example, forward-thinking architect firm Superdraft, championing eco-friendly designs and employing money-saving materials and procedures. Renters, on the other hand, want lower bills and sustainable lifestyle. Therefore, the objects are getting more energy-efficient, healthier, and smarter. In your case, the lesson is clear: being on the cutting-edge of the industry pays dividends.

The Throne is Yours

The ultimate goal is to achieve positive cash flow and see your domain expanding. That way, the more you buy, the more you will be able to buy in the long-term. Here, cap rate (a measure of ROI) is the king, not you. Therefore, calculate baseline expenses and expected income. Set money aside in the budget for management, maintenance, and repairs. Once you become able to cover all the expenses and tap into rental income, you have the freedom to explore various lucrative options. You can take more risks, focus on projects with huge upside, and pave your way to financial glory.

Attaining Imperial Greatness

Going from rags to riches does not occur overnight. The real estate game is played over the long haul, it is more of a never-ending marathon that swift race. To make it big, come up with a killer strategy and plan. Evaluate your skills, finances, goals, and tolerance to risk. Always show due diligence and do your homework.

Take baby steps first and then advance by leaps and bounds down the wealth building road. Find properties that cash and support your expansion campaigns. Create a burgeoning empire that stands a test of time and grows beyond the wildest imagination. 

Author Bio: Will Sandford is a Sydney based wood architect, blogger and contributor on interior design and ecology blogs. Besides that, he is also interested in home improvement combined with green technology. In his spare time, Will enjoys surfing and rock climbing. He is also a regular contributor to SmoothDecorator. Connect with him on Twitter.

If you liked this article, subscribe to Rentometer's email newsletter to stay up-to-date on the latest trends in rental housing.