According to Mark Roemer Oakland, the real estate market is a lucrative one and a great alternative to the stock market for investors. If you’re a beginner, check out the following investment strategies that may help you out.
- Get rental properties – As long as your property can attract tenants, you’ll enjoy stable and passive income. Apart from investing in rental properties at good locations, it’s also important to screen your tenants thoroughly and make sure that they are able to pay the rent. You also need to choose tenants who are going to stick around for a long time. That’s why great rental listings and tenant appreciation go hand in hand.
You can also use a property management company to make sure that those rental properties remain a passive investment opportunity. For around 10 percent of the rental income, a property management company will screen your tenants, get security deposits, do maintenance and even handle evictions on your behalf. If you invest in several rental properties, hiring a property management company makes things more efficient.
- Live-in flip – A live-in flip is a unique investment opportunity where you flip a property while living in it. You can even get help from a property management company and get tenants while the property is being renovated. However, small savings isn’t the only benefit of living in a property while it’s being flipped.
A live-in flip provides you the opportunity to save tens of thousands or even hundreds of thousands of dollars on capital gains taxes. As long as you’re living in a property that’s your primary residence for at least two years before the sale, you qualify for capital gains tax exemptions. Even if you have to move away from the property before two years, you get those tax exemptions if it’s due to a job relocation, military deployment, or change in health.
- Rehabbing – When you buy and hold a property it’s known as rehabbing. To make the most out of this strategy you need to make sure that your property gets tenants throughout the holding period. This way you enjoy a stable passive income while the property appreciates in value. You don’t want to stretch out the rehab period too long since it may lock out your capital from other more lucrative investment opportunities.
Moreover, when you hold a property for a certain amount of time, you get access to a low-equity line of credit. This way you can do a 1031 exchange at the time of sale and avoid paying large sums of money on capital gains taxes. The best thing about this strategy is that it can be applied to different kinds of asset classes, from small single-family homes to large apartment complexes.
Mark Roemer Oakland suggests that you do your own research, take inspiration from the above-mentioned strategies and enter the market with a sound strategy of your own. It’s important to remain calm and hedge your bets carefully.