20 Real Estate Investment Strategies for Beginners

The primary residence strategy is a real estate investment strategy that involves purchasing a property with the intention of using it as a primary residence. This strategy is primarily focused on finding a property that meets the homeowner's needs and is expected to appreciate in value over time. The goal is to build equity and wealth over the long-term by owning a property that appreciates in value, while also enjoying the benefits of home ownership such as stability and security. This strategy typically requires a significant amount of capital for the down payment, closing costs, and ongoing expenses such as mortgage payments, property taxes, and maintenance costs. Successful implementation of this strategy requires careful consideration of personal finances, lifestyle goals, and the real estate market.

The long-term rental strategy is a real estate investment strategy that involves purchasing a property with the intention of renting it out to tenants for an extended period of time, typically 6 months or longer. This strategy is focused on generating steady rental income and building equity over time as the property appreciates in value. The goal is to create a consistent cash flow stream while maintaining the property to attract and retain tenants. Successful implementation of this strategy requires careful consideration of the property's location, condition, and potential rental income. Additionally, managing a long-term rental property requires strong communication and organization skills to ensure the property is well-maintained and tenants are satisfied.

The extra space rental strategy is a real estate investment strategy that involves purchasing a property with the intention of renting out additional space, such as a garage, storage unit, or parking spot. This strategy is focused on generating rental income from unused or underutilized space on the property. The goal is to create a passive income stream while utilizing the property to its full potential. Successful implementation of this strategy requires careful consideration of the property's layout and potential rental income for the extra space. Additionally, managing extra space rentals may require additional tasks such as maintenance and security to ensure the safety and satisfaction of renters. It is important to comply with local regulations and obtain necessary permits for any extra space rental activities.

Real Estate Investment Trusts (REITs) are companies that own, operate, and manage income-producing real estate assets such as apartment buildings, office buildings, retail spaces, and industrial properties. They allow individuals to invest in real estate without owning and managing physical properties themselves. REITs are required to distribute at least 90% of their taxable income to shareholders as dividends, making them an attractive investment for those seeking regular income streams. They are also often publicly traded, making them a liquid investment option. Successful investing in REITs requires careful consideration of the type of properties the REIT invests in, its financial performance, and the overall state of the real estate market.

Real Estate ETFs (Exchange-Traded Funds) are investment funds that track a real estate-related index, such as a REIT index or real estate stock index. They allow individuals to invest in real estate without owning and managing physical properties themselves. Real Estate ETFs are traded on stock exchanges like regular stocks, making them a liquid investment option. They offer diversification and the potential for growth in the real estate market. Real Estate ETFs may also offer tax advantages over other real estate investment options. Successful investing in Real Estate ETFs requires careful consideration of the ETF's index, fees, performance history, and the overall state of the real estate market.

The real estate raw land strategy is a real estate investment strategy that involves purchasing undeveloped land with the potential for future development or appreciation in value. This strategy is focused on holding the land for a longer-term investment with the potential for future gains from appreciation, rezoning, or development. The goal is to create a passive income stream through holding the land, while also potentially profiting from a future sale or development of the property. Successful implementation of this strategy requires careful consideration of the property's location, zoning regulations, and potential for future development. Additionally, managing raw land may require knowledge of environmental regulations, land-use planning, and the potential risks associated with natural disasters. It is important to comply with local regulations and obtain necessary permits for any land-use activities on the property.

Real estate notes, also known as promissory notes or mortgage notes, are legal documents that outline the terms of a loan secured by a real estate property. They are a type of debt instrument that represents the borrower's promise to repay the loan, including the interest and principal, over a specified period of time. The note is typically backed by a mortgage or deed of trust, which serves as collateral for the loan. Real estate notes can be bought and sold by investors, who receive regular interest payments on the note until it reaches maturity or can be sold to another investor for a profit. Real estate notes offer an opportunity for investors to earn passive income from the interest payments without owning the physical property.

The real estate notes strategy is a real estate investment strategy that involves purchasing notes secured by real estate, such as mortgages or trust deeds. The primary goal is to generate regular cash flow from the interest payments on the notes. Investors may purchase the notes at a discount and receive regular payments until the note reaches maturity. Alternatively, the notes can be sold to other investors for a profit. Successful implementation of this strategy requires careful evaluation of the creditworthiness of the borrower, the underlying real estate asset, and the terms of the note. Additionally, managing real estate notes may require knowledge of foreclosure laws and procedures, as well as an understanding of the local real estate market. It is important to consider the potential risks and rewards of investing in real estate notes before committing capital to this strategy.

The real estate mobile home parks strategy is a real estate investment strategy that involves purchasing and operating mobile home parks. Mobile home parks are typically leased to tenants who own their own mobile homes but rent the land on which the homes are situated. The primary goal of this strategy is to generate rental income from the tenants, with the potential for appreciation in property value over time. The strategy may involve acquiring and improving existing mobile home parks or developing new parks in desirable locations. Successful implementation of this strategy requires careful consideration of the property's location, market demand, tenant quality, and overall financial performance. Additionally, managing mobile home parks may require knowledge of tenant relations, property maintenance, and local regulations governing mobile home communities. It is important to evaluate the property's cash flow and potential for future growth when considering investing in mobile home parks.

The real estate strategy involving sandwich lease options is a creative real estate investing technique that involves a three-party agreement between a property owner, a tenant-buyer, and an investor. The investor, also known as the middleman, enters into a lease option agreement with the property owner to lease the property for a specific term and with the option to purchase the property at an agreed-upon price. The investor then subleases the property to a tenant-buyer, who has the option to purchase the property at a higher price than the investor's purchase price. The investor earns a profit by collecting the rent from the tenant-buyer, while paying rent to the property owner and pocketing the difference between the rent collected and the rent paid. Successful implementation of this strategy requires careful evaluation of the property's value, market demand, and the tenant-buyer's ability to purchase the property at the end of the lease term. Additionally, managing the tenant-buyer's expectations and ensuring that all parties understand the terms of the lease option agreement is critical to success in this strategy. It is important to consult with a real estate attorney and conduct thorough due diligence before entering into a sandwich lease option agreement.

In Canada, property ownership can include different rights and interests that can be separated and owned by different individuals or entities. Surface rights refer to ownership of the land and anything on it, such as buildings and trees. Sub-surface rights refer to ownership of the ground below the surface, which can include minerals, oil, and gas. Mineral rights refer specifically to the ownership of minerals, while Riparian rights refer to the right to use and access water on or near the property, such as a river or lake. Air rights refer to the right to use and control the space above the property, such as for building upward or erecting a structure like a billboard, antennae tower, anchored balloon, or above ground structure.

These different rights can be bought, sold, or leased independently of each other, and it is important for property owners to understand what rights they own or may be giving up when entering into agreements with other parties. In some cases, property owners may not own certain rights, such as mineral or air rights, and may need to negotiate with the rightful owner to use or develop the property in a desired way. Understanding and managing these different rights is important in Canadian real estate transactions and can have significant implications for property values and potential uses.

Note: Mineral Rights in Canada are mostly owned by Territorial, Provincial or Federal government agencies.