Choosing Your Next Property Investment Strategy
Are you thinking of ways to grow your business with a new property investment strategy? Whether you are a beginner in the real estate market or not, there are many ways to improve your investment portfolio.
The Best Property Investment Strategies
Buy-to-Let
One of the most popular property investment strategies is purchasing a property to earn rental income. The property also serves as a long-term investment considering that its value will grow over time.
Buy and rent option is perfect for properties that are located in areas near universities or office hubs where the demand for rentals is high and steady.
Key Factors
- Good location
- Peaceful neighbourhood
- Easy access to amenities like restaurants, parks, markets and hospitals
- Excellent property management
Buy and Hold
With a buy and hold property investment strategy, the ultimate goal is to purchase a property and hold it long-term before selling for a huge profit. In the meantime, you can put the property on lease to cover property expenses like taxes and maintenance fees.
Key Factors
- Must be located in a developing area or a place with great potential to grow/expand
- You can afford to wait for an average of 5-10 years before selling the property
- The building age and condition must be evaluated
Buy and Flip
With flipping, your goal as an investor is to earn profits from selling a recently purchased property. In a busy real estate market, prices can change and increase drastically. Your gain will come from the price appreciation on your subsequent resale of the property. It can be a risky move for beginners, but many are attracted by the promise of immediate return on investment.
Key Factors
- Knowledge of the real estate market
- Careful planning and good judgment
- You must be able to buy low and sell high
Fix and Flip
In a fix and flip strategy, you buy a property that you intend to fix or renovate before selling at a profit. In most cases, you can buy these properties at a low price as the buildings are not in good condition.
After the renovation work, the market price of the property is likely to go up. Your next step as an investor is to sell the house as fast as possible to recover the expenses and earn your profits.
Key Factors
- Extensive knowledge of the local market
- Careful selection of the property to be purchased
- A detailed plan and enough budget for the renovation work
Active Property Development Strategy
Unlike the strategies listed above, this one involves a lot more hard work. You will be the one to plan and execute the construction of the building, which you can later rent out, hold or sell.
Key Factors
- Finding the right location
- A clear plan
- Capital or source of funding
- Reliable and well-coordinated teams
What's your pick?
The best property investment strategy in NZ depends on your skills, knowledge, risk appetite and financial capacity. However, one thing is for sure. You really need to plan and strategise in order to achieve your goals.
If you want to know more about property investment and property management in Auckland, you can send us a message here.