3 Types of Property Investors - Which One Are You?

When it comes to property investing, different investment strategies helps to manage risk that cater to different goals and outcomes. Here are three common types of property investors:

1. Buy-and-Hold Investors

Buy-and-hold investors buy properties with the intention of keeping them for a long period of time. They focus on generating steady rental income and benefiting from the appreciation of the property value over time.

Their primary goal is long-term wealth accumulation and stable, passive income. Generally, buy-and-hold investors tend to be more risk-averse. They invest in properties in good location with strong rental demand. Buy-and-hold investment strategy is also suitable for busy professionals who prefer to have the hands-off approach. These busy investors prefer to rent their properties to long-term tenants who pay fairly good market rent.

2. Flippers

Flippers are investors who buy properties with the intention of selling them for a profit quickly. Their focus is on short-term gains through acquiring undervalued properties, spending as little as possible on renovation, and selling them at or above average market prices.

Flippers usually have a keen eye for undervalued properties. Coupled with strong project management skills, and the ability to handle the renovation costs, flippers thrive in markets with high volatility with significant capital appreciation potential.

3. Hybrid Investors

Hybrid investors combine elements of both buy-and-hold and flipping. They usually buy properties and hold onto them for a number of years before selling them.

While waiting for the right time to sell, hybrid investors tend to rent out these properties to generate cashflow to help service the mortgage.

Hybrid investors also don't mind buying properties that are vacant or those that require renovation. Their strategy is to add as much value as possible to the property so that it can fetch a good selling price later on.

Hybrid investors aim for a balance of steady cash flow and capital gains.

This approach requires significant effort in terms of finding deals, overseeing renovations, managing tenants, and marketing properties. Thus, hybrid investors are usually adaptable, capable of managing rental properties, and knowledgeable about market trends to time their sales for maximum profit.