1. Buy & Hold

What it is:
The investor purchases a property and holds it for many years to earn rental income and long-term appreciation.

Example:
Emma buys a house for $200,000 and rents it for $2,000 per month. After paying the mortgage and expenses, she nets about $500 per month. After ten years, the home appreciates to $300,000, resulting in additional equity gains and rental income.

Why it works:

• Generates steady passive income through rent.
• Builds equity over time as mortgage payments reduce debt.
• Rental property owners can benefit from tax deductions such as depreciation, property taxes, and mortgage interest.
•  

Key considerations:

• Property management costs may reduce profits.
• Market downturns can temporarily lower property values.

2. Fix & Flip

What it is:
The investor buys a distressed property, renovates it, and sells it for a higher price in a short period.

Example:
Jake purchases a fixer-upper for $100,000, invests $50,000 in renovations, and sells it for $200,000—realizing a profit after costs.

Why it works:

• Can generate quick profits compared to long-term rentals.
• Renovations can add value beyond general market appreciation.

Key consideration: Requires expertise in market pricing, contractor management, and cost control.

3. BRRRR Method (Buy, Rehab, Rent, Refinance, Repeat)

What it is:
An investor buys a property, renovates it, rents it out, refinances it at a higher value, and uses the loan proceeds to buy another property, repeating the process.

Example:
Sophia buys a duplex for $150,000, spends $50,000 on repairs, and rents both units for $2,000 per month. The bank revalues the property at $250,000 and issues a new mortgage for $200,000, allowing her to recover her initial investment and buy another rental.

Why it works:

• Allows investors to recycle capital instead of tying up cash in a single property.
• Builds a portfolio faster with minimal upfront capital.

Key considerations:

• Seasoning period: Many lenders require 6-12 months of rental history before refinancing.
• Refinancing limits: Most banks allow cash-out refinancing up to 75-80% of the appraised value.
• Interest rates fluctuate, which may impact loan terms.

4. House Hacking

What it is:
An investor buys a multi-unit property, lives in one unit, and rents out the others to offset mortgage costs.

Example:
Tom buys a four-unit building, lives in one unit, and rents out the other three for $1,000 each. His mortgage is $3,000 per month, so his rental income covers his entire payment, allowing him to live for free.

Why it works:

• Reduces housing expenses while building equity.
• FHA loans allow house hacking with only 3.5% down, but the owner must live in the property for at least one year.

Key considerations:

• Owner-occupancy required for FHA and VA loan programs.
• Zoning and rental restrictions may limit the number of tenants.

5. Short-Term Rentals (STR) – Airbnb & Vacation Homes

What it is:
The investor rents out a property for short stays instead of long-term leases, often through platforms like Airbnb or VRBO.

Example:
Lisa buys a beachfront condo and charges $200 per night on Airbnb. With an average of 20 nights booked per month, she earns $4,000 per month, compared to $2,000 from a traditional lease.

Why it works:

• STRs generate higher income than long-term rentals.
• Owners can adjust pricing dynamically based on demand.

Key considerations:

• More management required, including cleaning, guest communication, and maintenance.

6. Real Estate Wholesaling

What it is:
Wholesalers find discounted properties, sign a contract, and assign it to another investor for a fee—without purchasing the property themselves.

Example:
David finds a property worth $150,000, negotiates a contract to buy it for $100,000, and assigns it to another investor for $110,000, making a $10,000 profit without using his own capital.

Why it works:

• No large upfront investment needed.
• Quick transactions without long-term property management.

7. Lease Options & Rent-to-Own

What it is:
A tenant rents a property with an option to buy it later at a predetermined price.

Example:
John leases his property with an option for the tenant to buy later, with part of the rent contributing toward the eventual purchase price.

Why it works:

• Attracts tenants who may become future buyers.
• Offers the investor an option fee and potentially higher rental income if the purchase does not occur.

Key considerations:

• Option fees (typically non-refundable) should be structured carefully.
• Contracts must be clearly defined to prevent disputes.

8. Seller Financing

What it is:
The seller acts as the lender, allowing the buyer to make payments directly instead of using a bank loan.

Example:
Mark sells his property for $200,000 but instead of requiring a mortgage, he allows the buyer to pay $1,500 per month for 10 years at 5% interest. Mark earns money from interest payments and avoids discounting the property for a quick sale.

Why it works:

• Buyers gain financing without strict bank requirements.
• Sellers earn extra profit from interest payments.