Active Real Estate Investing Explained (DIY)– Part 1

This type of real estate investing involves a hands-on approach. It requires (at least basic) prior knowledge and managerial capabilities.
You can work as an active real estate investor full-time or part-time. The amount of time you dedicate to it depends upon the number of projects at hand.
Active real estate investing is done either on a shared or self-owned basis. The duties involving this type of investing is shared by the owners. Since they have to work on their own, some financial and management experience is a must.

Different Types of Active Real Estate Investing

This type of real estate investing can be classified into three types.

House-Flipping

House flipping is often practiced by real estate investors. It is considered to be the most active and hands-on way of investing in real estate.
Initially, the investor purchases a house at a cheaper price. This hunting takes place for quite some time as finding the best deal is crucial. After this, some major renovations are made to and the house is again placed on the market for sale.

Rental Properties

Another way of entering the active real estate investing is rental properties. This type of investing requires managerial skills and vision. Unlike house flipping, this type involves long-term investment. While working to look for a rental property the investor can go for any type of property (residential, commercial, or industrial). Through this approach, the investors buy a property and look for tenants.
Once the right tenants are found, the property is then handed over to them and a continuous monthly cash-flow is generated through rent.
This investing mode works best for investors who want to add more properties to their portfolio and generate constant cash-flow at the same time.

Airbnb

Investors can also participate in active real estate investing through Airbnb. It is a tech company that allows people to rent out a place to live on a nightly basis. The idea is similar to a hotel but tourists looking for a cultural experience often book their stay through this platform.
Property owners—instead of renting out their place to permanent tenants go for this option as it involves more cash-flow and less work. Although the cash-flow generated through Airbnb is irregular, properties in tourist areas generate more cash than a property on long-term rent to a single tenant.
Moreover, these properties involve least managerial skills and are easy to handle.

The pros of ACTIVE REAL ESTATE INVESTING

Participating in the active form of real estate investing can be beneficial in a variety of ways:

• More profits can be gained.
• The experience gained because of the process is great.
• A magnanimous investor portfolio can be made.

The second benefit is even greater than the number of profits generated. Once you have an idea of how things work, you will be able to make great progress with each step you take.