Andreas Anusavice Explains Real Estate Strategies

Buying properties when they are cheap and selling them for a gain seems quite simple. That is, after all, the entire foundation of real estate and how investments should be made. Well, if that was the case, it would be fair to assume that everyone is an expert. Unfortunately, the industry is a lot more complicated and comes with a plethora of rules. Knowing when and how to purchase is something that takes time to learn. Therefore, most inexperienced individuals will take years to become true experts. Nevertheless, there are some main routes that every real estate entrepreneur can take.

Buying to Rent

One of the most common ways that people make money from owning real estate is by renting. Andreas Anusavice, a real estate expert from Florida, sees this as the best way to generate passive income. Additionally, the way that it functions is quite simple. One purchases a property and puts it on the rental market. Depending on the number of units, they may hire a management agency to handle resident inquiries and day-to-day issues. After people sign the lease and move in, income starts flowing in. Every month, the owner gets a fixed amount of money that people pay for rental costs. Since there were no physical actions taken to earn this income, it is labeled as "passive".

Generally speaking, owners of properties in popular areas prefer renting. For example, someone who owns a large building in Hollywood should not even consider selling as an option. Due to the rapid developments in the area, renting is a better long-term investment. Statistically speaking, the one-time income from the sale is nowhere near the cash flow that the asset will provide over time, particularly as the area continues to grow and prices continue to increase.

Buying to Restore and Sell

People who are unwilling to get into the leasing industry have other options. One of the most popular is to re-sell homes. Although many television shows make home flipping seem effortless, it is actually very complex. First, someone like Andreas Anusavice must find the property that is worth investing into. If restoration must take place, every cost gets budgeted in order to analyze the overall profitability. Then, once the transaction is completed, the construction begins. Depending on the amount of work that the restoration crew must do, some projects take longer than others.

Usually, while the restoration is underway, the person in charge looks for a buyer. That proactive approach makes it easy to conclude the endeavor faster and minimize downtime. Since almost every project experiences unforeseen difficulties, some deadline issues may arise occasionally. Once the home is improved and ready for the market, it’s ready for sale.

This strategy has proven particularly effective in Hollywood after the housing market crash of 2008, since space is at a premium for new developments. Savvy investors were able to scoop up property cheaply, improve the housing over time, making passive income off rent, and sell the property for a hefty profit once the market corrected.

Speculative Real Estate

In some cases, the land may hold little value currently, but to a trained eye with a knack for investment, many properties can be turned profitable under the right conditions. When it comes to speculative real estate, there are two main schools of thought. There are short term investments when the investor anticipates a change in the market, allowing him to essentially “day trade” in properties.

On the other end of the spectrum, some investors choose to speculate in the long term, prioritizing properties with certain key aspects that are currently outside the target area of most other investors. These types of real estate purchases anticipate the growth of an area over the course of years or even decades. Often long-term speculation relies on the continued development of a particular area, or some key feature within the property that will become a hot commodity in the years to come. Consider for example the Hollywood Hills area, where houses sell for prices in the millions. A speculative investor in the 20s or 30s when Hollywood was just beginning may have purchased hillside properties for a fraction of their current value, and now recognize a profit only rivaled by the recent Bitcoin bubble.

With all forms of speculative purchasing, there is an inherent risk that deters many traditional investors. This is due to the uncertain nature of the overall real estate market, as well as an inability to accurately predict the developments of an area in the coming years. This strategy opens a potential investor up to increased risk, but also the potential of astronomical gains when conditions line up perfectly.