Top 3 Real Estate Investment Strategies

December 15, 2023

Did you know that nearly 90 percent of all millionaires made a large percentage of their money through real estate? While this statistic may seem hyperbolic, the cold hard truth is that real estate is a tried and true method to wealth creation and long-term financial stability.

But the problem lies in getting started. Real estate investing is often associated with large upfront down payments and stringent qualification criteria. This may be true in some cases, but for the vast majority of real estate investors, it’s not all too difficult to get started.

Why Invest in Real Estate?

Aside from the benefits we mentioned above, there are tons of reasons to invest in real estate, including:

Property Appreciation

Real estate investments have consistently been shown to increase in value over long-term periods. This means you’ll take advantage of capital gains when it comes time to sell the property down the line.

Hedging Against Inflation

Real estate is used by investors and homeowners as a hedge against inflation in many cases. As the cost of living and the price of goods and services increases, rental income and property values often increase as well.

This hedge against inflation can help you preserve wealth over time in addition to protecting yourself from the drawbacks of a high-inflation economy.

Tax Benefits

Whether you’re a single homeowner or real estate investing mogul, one of the main benefits that property owners can take advantage of are tax incentives offered by the federal government.

Expenses involving depreciation, interest, and maintenance are tax deductible and can help reduce your overall tax liability at the 

Top Real Estate Investing Strategies

Now that you understand the reasons to invest in real estate, it’s time to get started. Here are three of the top real estate investing strategies for new investors:

Multi-Family Investing

Multi-family properties include all residential properties that house two to four units. For example, duplexes, triplexes, and fourplexes are examples of common multi-family properties.

The reason multi-family investing can be a great opportunity is the potential for rental income from more than one tenant. 

A duplex has two units, a triplex has three units, and a fourplex has four units in a single property. As long as the units are occupied, you’ll be collecting monthly rent payments from each tenant and increase the cash flow compared to a traditional single family home.

Fix and Flips

Fix and flip investing is a riskier type of real estate investment strategy that requires investors to spot a distressed home that they can quickly sell after making necessary renovations to the property.

Fix and flips can be profitable, but it’s important to understand that unforeseen circumstances may arise. There may be hidden foundation problems, faulty electrical work, or zoning restrictions that can quickly derail the project.

We recommend working with an experienced real estate investor or flipper before jumping in with your first solo project. 

Owner Occupied Properties (House Hacking)

An owner occupied property (also known as a house hack) is a clever way to get started with real estate investing. This method involves purchasing a multi-family home with the intention of living in one of the units and renting out the others. 

One main benefit of house hacking is that you receive rental income from the tenant in the additional unit which reduces your monthly mortgage payment. Additionally, you’ll get experience in real estate investing without assuming the amount of risk that fix and flips or traditional multi-family investing requires.

Ready to Start the Buying or Selling Process?

The Kim Holland Homes team is the #1 real estate team on Long Island. Contact us or call Kim today at 516-236-6303 to start the process of finding your dream home.