Tips To Ramp Up Your Real Estate Investment Strategy In 2023

If you are a savvy investor, you will probably have real estate in your portfolio because these assets offer immense growth and profitability. But you cannot overlook the risk potential of this form of investment. A sudden dip in the market can lead to massive losses, so you need to invest cautiously. Fortunately, a good understanding of the industry and strategic planning can help keep your investment safe and thriving. In fact, you must also reconsider your investment approach according to current trends and circumstances. Let us share a few tips to ramp up your real estate investment strategy in 2023.

Diversify as much as possible

Diversification is the key to success in the real estate investment market. If you haven’t diversified into new markets or niches yet, consider doing it this New Year. You can research the most profitable markets in the country and invest in them. Likewise, think beyond residential and commercial investments and try your luck with vacation rentals. The more you diversify, the lower your risk and the higher your profit potential.

Explore the hidden market

Another tip to get better with real estate investment in 2023 is by exploring the hidden market. For example, you can look for distressed sellers because they make the best option to buy low and seal the deals quickly. Such sellers prefer to close the sale without putting their properties on the market. You can make the most of these deals because you need not compete with other buyers.

Work with green-minded developers

Buying new projects is an excellent option because such developments are affordable and fetch high resale values. But you must stick with green-minded developers because sustainable properties are trending. Besides selling on profits, these properties pay back even during holding them. For example, green developers prioritise solar installations because they fetch benefits like Commercial Solar Financing and tax credits. Investors get the benefits of tax cuts and credits on buying these properties from developers, making them an excellent investment option.

Manage your risks

Experts recommend thinking beyond the profit potential of real estate investment this year. You must emphasise risk management to keep your money safe in the long run. Sticking with a few common-sense basics is enough. Commit to steering clear of debt in the first place. Researching investment properties well is another viable measure to stay ahead of risks. Also, maintain an optimal cash reserve to look after unexpected expenses such as repair requirements.

Maximise real estate value

Maximising the value of your real estate property should be your top priority, as it can help you make more profits. Small steps can make a difference, so consider building an additional dwelling unit at your residential property to increase its rental potential. Commercial investors can add to their cash flow by installing an ATM in the extra space or renting out a part of the lobby to a small retail counter service.

A few small measures can help you take your real estate investments to the next level. Try these simple tips to maximise your profits in 2023 and beyond.

5 Unusual but Profitable Investments You Should Consider

The options available for investments are unlimited nowadays. Gone are the days when the only viable investment you could think of was “stocks.” Now, the choices available to potential investors are numerous and picking the one that suits you the best has become easier.

Besides, this broad spectrum of choices allows you to diversify your investment portfolio, which is a wise thing to do. As the saying goes, “don’t put all your eggs in one basket.” Similarly, you should put your money into various investment options rather than choosing only one and relying on it forever.

To make varied investments, you must expand your knowledge of this industry. To help you with that, we’ve compiled this article to give you insights into the less common investment options you may not have heard of before.

1. Invest in Whiskey

Yes, you read that right! Investing in whiskey is quite lucrative; however, not many people know about it. This form of investment has great potential to turn you into a millionaire, but you should learn the ropes before you invest.

Although this is quite an unusual option to consider, if you know a lot about whiskey and can find a trustworthy merchant, nothing can stop you from making a huge profit from it. You will need a little bit of time to do all the paperwork and shift the ownership of the asset in your name to make the whole process legal.

Bottles that are rare to find are a great investment. If you have a good eye and can spot them, you can profit significantly from them. Go ahead and read the Whiskey as an investment article to learn more on how to invest in whisky.

2. Buy Some Cryptocurrency

In this digital world, assets are also slowly turning digital. You no longer need physical assets to be considered wealthy. Instead, the currency of the new era is digital and works through its online presence and having this currency as an asset can add to your wealth.

Yes, we are talking about cryptocurrency. Although the market of crypto is highly volatile- you must have heard about its ups and downs before- it has the potential to help you make huge profits in the long run.

That’s why many people are investing in cryptocurrency and making big profits from it. It is quite an unusual investment option that you should definitely try to expand your portfolio.

3. Vintage Cars Are a Great Investment

Yet another unusual way to invest your money is by buying vintage cars. Now you would think, as cars depreciate in value with time, how could such a commodity turn into an asset? Well, that’s not true for classic and vintage cars. As a matter of fact, as time passes, the value of these cars’ augments!

However, you need to get in touch with a professional appraiser to evaluate these cars before you buy them. Investing in vintage cars requires some caution and care, or you may get scammed!

4. Get Some Gold Coins

Another unusual way of investing is by buying gold coins. Though uncommon, it’s not a new way of making money if you invest correctly. What’s more, for ages, people have been relying on the value of gold and its ability to make them rich with time.

However, you can’t expect these gold coins to give you massive returns immediately. Instead, you need to be patient and hold them for quite some time.

While buying gold coins, consult a dealer that is reputable in the market to avoid getting a flawed product.

5. Collect Some Rare Stamps

It might have been your hobby in childhood to collect stamps, but did you know doing this now can help you become a millionaire? Rare stamps are a great but unusual form of investment. If you choose and procure the right kinds of stamps, you may make a lot of money out of them.

However, you will need to hold these stamps for a long period. For instance, it can take you as many as ten years to make a profit off of these stamps. Therefore, make sure you do thorough research and buy only the rare stamps that possess some value and can appreciate through time.

Make An Unusual Choice NOW!

Investing in unusual products may make you earn more than you would have earned by sticking to the usual way. However, as lucrative as this scheme may appear, it could be full of scams! That’s why, whatever unusual investment you choose, make sure to be well aware of all the pitfalls associated with it before you make your investment.

Conclusion

Venturing into unusual but profitable investments can be an exciting way to diversify your portfolio and potentially increase your returns. While these options offer unique opportunities, they also come with varying degrees of risk and require thorough research and due diligence. Whether you’re drawn to rare collectibles, disruptive technologies like blockchain, or tangible assets like farmland and fine wines, staying informed and seeking expert advice will be key to making informed investment decisions. Remember that all investments carry some level of risk, so it’s essential to align your choices with your financial goals, risk tolerance, and overall investment strategy. By carefully considering these factors, you can embark on a journey of exploring unconventional investments while aiming for profitable outcomes.

5 Types of Real Estate Investments

There are different types of real estate investments, but mostly belong to two categories – physical real estate investment, such as land, commercial and residential properties, and other modes of investing that don’t demand owning physical property, like crowdfunding and REITs.

Investing in physical, traditional real estate can provide a high return, but it also comes with high ongoing costs and demands more money upfront. Crowdfunding and REITs platforms come with a decreased financial barrier to entry, which means you can invest in various types of real estate for way less than what it would cost to invest in one traditional property.

The alternative real estate investments also provide the rare advantage of not having to put on pants for investing or leave your home. Purchasing and owning real estate is an investment strategy that can prove to be lucrative and fulfilling.

As opposed to bond and stock investors, interested real estate owners can utilise leverage to purchase a property by paying a bit of the full cost upfront, then paying the balance off, with interest. Although a standard mortgage takes 20% to 25% as down payment, sometimes, 5% is all it takes to buy a whole home.

If you are interested in investing in real estate, below are the 5 categories to consider.

1. Rental Properties

Possessing rental properties is a stellar opportunity for people who boast DIY renovation skills and patience to manage tenants. But this strategy demands substantial capital to cover vacant months and pay upfront maintenance cost.

Pros

  • Maximises capital by leverage
  • Offers steady income
  • Property can appreciate over time
  • Tax-deductible related expenses

Cons

  • Tenants can damage your property
  • Handling tenants alone is hectic
  • Income is reduced in possible vacancy

As per the US Census Bureau Data, the sales costs of new homes regularly boosted in value from 1960s to 2007, before reducing in the financial crisis.

2. Real Estate Investment Groups (REIGs)

These are perfect for people who wish to own real estate without the tension of running it. Investing in this method requires a capital and access to financing. REIGs are tiny mutual funds that invest in rental properties.

In a standard real estate investment group, a company purchases or builds a range of condos or apartment blocks, then permits investors to buy them via the company, thus joining the group.

So, one investor can possess a single or various units of self-sustained living space, but the company running the group collectively manages the maintenance, units, interviewing the tenants, and advertising agencies. In exchange for operating these management tasks, the company grabs a percentage of the monthly rent.

A common REIG’s lease is in the investor name and all the rental properties supply a part of the rent to guard against frequent vacancies. At this end, you will gain a portion of income even if your property is empty. If the vacancy rate for the properties doesn’t surge high, there should be enough to cover costs.

Pros

  • Guarantees appreciation and income
  • Better hands-off than possessing rental

Cons

  • Fees similar to the ones linked to mutual funds
  • Vacancy risk
  • Vulnerable to unscrupulous managers

3. House Flipping

This is for people who possess significant expertise in real estate marketing, valuation, and renovation. The strategy requires the ability to do or predict repairs if needed, and capital. House Flipping is the proverbial wild side of the industry.

Just how day trading is unique from buy-and-hold investors, flippers are different from buy-and-rent landlords. Real estate flippers usually want to profitably sell the undervalued units they purchase within 6 months.

Original flippers don’t invest in improving properties. So, the investment should already come with intrinsic value required to convert a profit without any changes. Otherwise, they will eliminate the property from contention.

Flippers who can’t quickly unload a unit can run into trouble as they often don’t have sufficient cash to pay the mortgage long-term. This can result in snowballing loss.

Another category of flippers earns by purchasing affordable homes in Dubai and adding value by renovating them. This can turn into a permanent investment, in which investors can afford to take a few properties only simultaneously.

Pros

  • Can deliver fast returns
  • Ties up capital for a brief while

Cons

  • Hot market unexpectedly cooling
  • Needs a deep market knowledge

4. Real Estate Investment Trusts

REITA is best for investors who need portfolio exposure excluding the usual real estate transaction. A real estate investment trust is developed when a corporation employs investor’s money to buy and handle income properties. REITs are purchased and sold on the prominent exchanges, just like stocks.

A corporation needs to pay 90% of the taxable profit in the form of dividend to regulate the REIT status. In this way, REITs prevent paying the corporate income tax, while a standard company would be taxed on profits and then decide whether or not to share the after-tax profits in the form of dividends.

Similar to standard dividend-paying stock, real estate investment trust is a solid investment for stock market investors who prefer a steady income. The reason why REITs are rare is because they can afford the entrance of investors in non-residential investment, like offices and malls, that are usually not possible for individual investors to directly buy.

More importantly, REITs are liquid as they’re essentially exchange-traded trusts. In short, you don’t need a title transfer or a real estate agent to cash out your investment. Practically, REITs are a formal version of a real estate investment group.

Lastly, while looking at REITs, investors should differentiate between mortgage REITs that offer financing for real estate and equity REITs that possess buildings. Both provide exposure to real estate, but the nature differs.

For instance, mortgage REITs focus on income from real estate mortgage financing, whereas equity REITs is traditional because it represents ownership.

Pros

  • Core holdings are cash-producing, permanent leases
  • Dividend-paying stocks

Cons

  • Leverage connected to traditional rental real estate doesn’t apply

5. Online Real Estate Platforms

Platforms investing in real estate are for the ones who want to join others to invest in a larger residential or commercial deal. Investment is done through the online platforms, which are called real estate crowdfunding. This strategy still demands investing capital, but less than what’s needed to buy properties.

Online platforms link investors who are searching ways to finance ventures with real estate developers. Sometimes, you can diversify your investments with less money.

Pros

  • Geographic versatility
  • Can invest in a portfolio of projects or single ones

Cons

  • Management fees