If you are thinking about Investing into Real Estate in 2024 then you might want to consider these Five Real Estate Investment Strategies .
As a Ottawa Real Estate Investor myself for about 7 years and a Realtor for 12 years I got a chance to get involved with some great Real Estate projects and other Investors which allowed me come across some great investment strategies which I will share five real estate investment strategies from my own experience as I have been involved in all of them.
1. Rental Properties - This is a great place to start your investment journey. A single income townhome or single home is typically the first investment people make as it is easier to purchase financially. It is easier to understand and you can slowly work your way up properties to a double or triple income rental properties and eventually to more doors as you scale. This is a great strategy for medium to longer term growth and safer investment.
2. Buy, Renovate, then Sell ( Also know as flipping) - This type of investment is usually a short term investment which can be lucrative but comes with higher risks. The goal is to purchase a distressed property, Rejuvenate the property with renovations and then put back on the market for sale as soon as possible for a higher price. This type of investment requires experience and a great renovation team. It is not as easy as the shows make it look like as you must find the right property at the right price, renovate with a strict budget, sell within needed price to make sure of profit while making sure you have a quick timeline for turnaround.
3. Buy, Renovate to Increase Value and number of units in building, Refinance and Repeat ( Also Known as BRRR but better) This type of investment is great as you can purchase a single income property such as a bungalow and turn it into 2 or 3 separate units by renovating the inside. We typically would take a bungalow or 2 storey unit and then add a Secondary Dwelling unit to the basement and then we would now we able to get 2 incomes from the property which typically will increase the value of the property and cash flow. If done right, you can refinance your mortgage after renovations to pull out any built in equity from the project so you can have some of the funds to purchase another investment property. A great strategy if done right and with right team and is a medium to long term strategy.
4. Second Mortgages and REITS ( Real Estate Investment Trusts) These large corporations Operate, purchase and manage income properties and provide you with a monthly, quarterly or yearly return on your funds invested and typically pay out between 8% to 12% yearly depending on the investment risk. These types of investments can be short term or medium-term investments and do not require a lot of experience which make them extremely popular for hands-off investors. The risk is higher as you in second position to be paid out in case of market or deal problems.
5. Real Estate Limited/General Partnerships - This is when you invest into a large development or land assembly projects with a general partner who handles majority of the project operation for you but you share in some of the equity growth and cash flows of the completed project depending on the terms of your partnership. This is a great chance to team up with a general partner who already has the land, the team and experience to complete a large-scale development project. This type of investment is longer term and usually requires limited partners to be on the mortgages and construction loans for the project when required. The risk is higher if not put together properly but if done right can be very lucrative for long term growth.
These are just some of the ways you can invest in Real Estate here in Ottawa and if you want to learn about my experience in any of these 5 investment strategies please reach out to me today.
The first thing you should always do is gain your knowledge and learn from others experience. Consider joining any of these three great investment groups in Ottawa: Ottawa Real Estate Investors Organization, Capital Connectors, Investher Ottawa Meetup.
