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High interest rates and property prices can deter even the most seasoned investors.
Fortunately, lucrative opportunities are still available.
GOBankingRates asked several experts what kinds of real estate willturn the biggest profit for investors this year.
Off-Market Distressed Properties
Sometimes, investing in ugly, rundown real estate can produce beautiful results.
Your tenants cover the mortgage, so youre building wealth while living for free.
Thats how you start in real estate when you dont have deep pockets.
My tenant pays about $1,500 a month.
Affordable Houses
Instead of fixing and flipping million-dollar houses, consider catering to those on a budget.
Affordability is one of the biggest issues facing home buyers when it comes to residential real estate.
Commercial Properties
While residential properties can be money-makers, commercial properties can line your pockets, too.
She also pointed to data centers as a low-overhead investment.
Set Compelling Goals
Wills encouraged investors to know their why.
Before making any decisions, real estate investors need to first consider their goals.
Some investors are looking to build a retirement nest egg.
Others want freedom from their regular day-to-day job, he said.
Get a Good Deal
The whole point of investing in anything is to generate a return.
You make your money when you buy, not when you sell.
If you overpay, it doesnt matter how nice your renovations are.
You will always struggle to make a profit, said Glanzer.
Calvo learned this hard lesson.
I lost $50,000 from workers abandoning the project and pocketing my money.
The court system did not enforce anything.
Good, honest workers are so valuable, said Calvo.
Understand Timing
Timing must be part of your investment strategy.
For long-term investments, theres never a bad time to buy.
If you hold for 10 years, youll come out ahead.
But real estate moves in cycles.
Typically, its eight years up and a few years down, said Stumpo.
Research, Research, Research
Youll make better deals when you have all the facts.
Wills said, Real estate investors should do as much research on the location as they can.
Research the local economy, growth trends and property values to understand whats happening in the market.
Embrace Debt
You dont necessarily need money in the bank to invest in real estate.
[You] should consider leveraging debt to keep more cash on hand.
There are so many factors out of your control when it comes to investing in real estate.
The one thing you might control is your decisions.
If you cant live with the worst-case scenario, then dont move forward with the investment, said Wills.
Glanzer said, Real estate isnt a get-rich-quick game.
Its about buying right, executing efficiently and knowing when to hold or sell.
I think you should focus on stacking small wins!
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