Investor · Burnsville, MN · Member since 2021 · 17 posts · 2 votes
Regardless of any other aspects (I know difficult to do). Solely looking at Cash on Cash return. What real estate method would you say has the highest YEARLY ROI? My research tells me short term vacation and/or flipping houses has the highest. To help answer the question: If you had 1 million dollars, and you provided the only income for the household how would you invest that money in real estate in order to provide the most profitable yearly net income? (Aka you take appreciation out of the equation, would just be a bonus since we are looking at net yearly income)
Rental Property Investor · Gilbert, AZ · Member since 2020 · 210 posts · 163 votes
5y
@Dilini Sundaram it really depends on what your goals are, both STR and House Flipping are high time intensive types of investing to get started with. Both can definitely have upfront higher returns than let's say Buy and Hold Rentals, but at some point you need to start evaluating your time within the equation and what your time is worth to you. For example, if you have a high earning W2 job currently, those options may not be the best solution for you, instead buy and hold rentals might be. On the other end, if you have more time available than money, then I'd say those options may be a good fit. If it were me in your scenario, I'd go secure $1M worth of good cash-flowing properties on 30yr mortgages. You can also mix strategies and use the BRRRR method to flip a house, hold it as a long term rental, and pull your capital out to redeploy on other deals.
Investor · Burnsville, MN · Member since 2021 · 17 posts · 2 votes
5y
@Brendan Miller Makes sense! Yes, I am trying to put all other factors (amount of work, amount of time) aside, and solely focus on the yearly ROI (so taking out appreciation as well) . Can then find others to do what is needed in the day to day. Thank you for the response!!