Your Real Estate Investment Guide: Strategies for Financial Success
Jeff LangJune 11, 2023
Three avenues you can take to make money with real estate investing.
Investing in real estate is an exciting avenue for making money, and today I’m diving into some proven strategies to help you maximize your earnings. Here are three primary methods for generating wealth in real estate:
1. Buying and holding property. This traditional approach involves purchasing properties with the intention of holding onto them for an extended period. Real estate appreciates over time, providing a solid return on investment. Many of my team members and I employ this strategy with our primary residences, benefiting from long-term value growth.
2. Adding value. This typically involves buying a fixer-upper, renovating and upgrading it, and then selling it at a higher price. However, in the current market conditions, an alternative way to add value is by incorporating an accessory dwelling. This extra living space can serve as an additional source of income through rentals or provide accommodation for family members. Before proceeding with this strategy, be sure to check your local laws and regulations.
3. Short- or long-term rentals. Short-term rentals, such as Airbnb properties, offer the potential for high returns, especially in popular tourist destinations. However, it’s crucial to understand and adhere to local laws before entering the short-term rental market. On the other hand, long-term rentals provide a more stable and consistent income flow, making them a reliable investment option.
Once you’ve earned profits from your real estate investments, it’s essential to consider strategies for long-term wealth creation. While many choose to cash out and enjoy their earnings, there are alternative methods that can help you defer taxes and build on your success. One such method is utilizing a 1031 exchange or a Delaware Statutory Trust (DST) to roll your profits into another property. These vehicles allow you to defer capital gains taxes, enabling your wealth to grow further. Stay tuned for more in-depth information on these strategies in the future.
If you're looking for a reliable real estate advisor in California, consider contacting Jeff Lang. He offers a free consultation to discuss your real estate goals and help you achieve them using his vast experience in the field.