Unlock Profits With 5 Low-Risk Real Estate Investment Strategies

Getting your Trinity Audio player ready...

Real Estate

A seasoned investor knows that big opportunities always come with a healthy dose of risk. However, what if you could discover lucrative opportunities that helped you rake in profits while minimizing risk? Well, real estate investments have the perfect balance.

When you are looking to invest in Salmon Arm real estate, it’s important to have a solid plan that maximizes your returns while reducing risks to a great degree. With the volatility in the stock market, real estate always becomes a safer haven to park and grow your wealth.

Low-risk real estate investment tactics you should try out:

1. House Hacking

House Hacking refers to generating income from the home you’re living in. That means renting out rooms to generate passive income. However, you need to vet the people you let in your home very carefully to minimize safety risks. From an investment perspective, this is a very low-risk endeavour since you don’t need to risk any asset.

Rentals allow you to recover your mortgage and extract maintenance costs as well. On the other hand, Shuswap home builders recommend building a duplex or triplex instead of a regular home. This eliminates any safety risk since there are different homes on the same property with separate entrances.

2. Fixing and Flipping

Most people consider Fixing and Flipping a risky strategy. However, if you do your research and apply sound tactics, it becomes a low-risk strategy. The goal is to find a property that needs a bit of work, fix it up and sell it on the market for a profit. Start looking at properties that are always in high demand. For instance, lakeview homes in Shuswap present amazing views and usually have high resale value.

Next, make sure that you have a rough estimate of the repairs that are necessary to make it a hot commodity on the market. Get the home inspected by Shuswap builders for a more accurate estimate. It’s also important to stick to a solid figure like the ‘70% rule’ to minimize losses.

For instance, let’s assume a flipped home to sell for $300,000, and the estimated repair, insurance, closing and other costs amount to $50,000. The 70% rule says that you shouldn’t pay more than 70% of that amount after deducting $50,000. In this case, that amounts to:

$300,000 x 70% = $210,000 – $50,000 = $160,000. You shouldn’t pay any more to acquire that property.

3. Crowdfunding or Syndication

Real estate crowdfunding and syndication both involve gathering funds from several investors to buy a large or expensive property. This strategy minimizes risk by distributing it among several individuals and also lowers the barrier to entry by reducing their financial burden. The main difference between both strategies is the platform and voting rights.

Crowdfunding platforms accept small investors with limited capital. However, you don’t have a say in the type of real estate holdings or their sale window. On the other hand, both private and public syndicates allow you to affect the decision in both holdings and sales. For instance, if you identify real estate in the Salmon Arm area to be a lucrative investment, you can present that idea to the syndicate.

4. BRRRR!

The BRRRR model is quite unconventional. However, when done right, it can allow you to expand your rental portfolio while maintaining decent cash flow. In this strategy, you look for properties that need a bit of fixing and have a good location. Buy them at a bargain and once they get fixed, refinance your next fixer-upper with a long-term mortgage. However, it’s best to use this strategy at the beginning and reduce your risk exposure with other investment tactics in this list.

5. AirBnB Empire

Platforms like Airbnb and Vrbo have opened up earning opportunities with minimal capital and they work well in touristy destinations. For instance, the Salmon Arm area is surrounded by lakes, adorned by pristine mountains and covered in lush green trails.

That’s why living in Salmon Arm and visiting it for a holiday retreat is a coveted option among Canadians. You can get long-term rentals on leasing properties and convert them into short-term rentals on Airbnb or build a vacation home and rent it out when you aren’t vacationing.

All of these might to a lot to take in. There’s no need to rush for gold and try out all of them to maximise your gains at once. Remember, these are low-risk strategies that are meant to be taken slow for steady gains over the long term. Start with one that fits you best and build your wealth to apply other strategies in the future.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top