Investment Strategies

Understand the 4 ways to make money in real estate and how the analyzer evaluates each one.

Real estate investors make money in different ways depending on their goals, resources, and local market conditions. The Real Estate Investor Analyzer evaluates all 4 strategies for every property you analyze, so you can compare them side-by-side.

Long-Term Rental (LTR)

Buy & Hold

Buy a property and rent it out for many years. Make money from monthly rent payments.

How It Works:
  1. You purchase a residential property (house, condo, duplex)
  2. Find a long-term tenant (typically 12-month lease)
  3. Collect monthly rent payments
  4. Pay mortgage, taxes, insurance, maintenance, property management
  5. Keep the difference as profit each month
  6. Property value may also increase over time (bonus!)
Best For:
  • Building long-term wealth
  • Steady, predictable monthly income
  • Investors with good financing (low interest rates)
  • Markets where rent is high relative to property price
Example:

Property Price: $300,000

Your Down Payment: $60,000 (20%)

Monthly Rent: $2,000

Monthly Costs: $1,600 (mortgage + taxes + insurance + maintenance)

Monthly Profit: $400

Over 30 years, you'd have paid off the house AND collected $144,000 in profit.

Short-Term Rental (STR)

Vacation Rental

Buy a property and rent it nightly or weekly like a hotel (Airbnb, VRBO). Higher income, more work.

How It Works:
  1. Purchase a property in a tourist/vacation area
  2. List it on Airbnb, VRBO, or similar platforms
  3. Rent to different guests each night or week
  4. Charge much higher nightly rates than monthly rent
  5. Pay more in management, cleaning, utilities
  6. Keep the higher difference as profit
Best For:
  • Tourist destinations (beaches, ski towns, cities)
  • Investors willing to manage guests closely
  • Properties where you can charge premium rates
  • Active investors with time to manage maintenance
Example:

Property Price: $400,000

Your Down Payment: $100,000 (25%)

Nightly Rate: $150/night

Monthly Revenue: ~$4,200 (at 70% occupancy)

Monthly Costs: $3,500 (mortgage + everything + cleaning + management)

Monthly Profit: ~$700

Higher profit, but requires active management and is riskier during slow seasons.

Mid-Term Rental (MTR)

Monthly Rental

Rent a property by the month (30-90 days). The hybrid approach—higher than LTR, less work than STR.

How It Works:
  1. Purchase a residential property
  2. Rent it out to corporate relocations, contractors, or others needing temporary housing
  3. Rotate tenants every 1-3 months
  4. Charge rates between long-term and short-term rentals
  5. More turnover than LTR, but less daily management than STR
Best For:
  • Towns with corporate relocations or military bases
  • Areas with temporary worker populations
  • Investors who want income between LTR & STR rates
  • Properties that don't qualify for top-tier STR markets
Example:

Property Price: $300,000

Your Down Payment: $75,000 (25%)

Monthly Rental Rate: $2,500

Monthly Costs: $2,000 (mortgage + taxes + insurance + turnover cleaning)

Monthly Profit: $500

Better than LTR income, but with more work than long-term rentals.

Fix & Flip

Buy, Fix, Sell

Buy an underpriced property, renovate it, and sell for profit. One-time profit, not monthly income.

How It Works:
  1. Find a property below market value (needs work)
  2. Purchase at a discount
  3. Spend money on renovations/repairs
  4. List for sale at market price (or higher)
  5. Sell and pocket the profit in a lump sum
Best For:
  • Generating large, quick profits
  • Reinvesting profits into new deals
  • Investors with construction knowledge/connections
  • Markets with big gaps between distressed and market prices
Example:

Purchase Price: $250,000 (distressed property)

Your Investment: $50,000 down + $40,000 in repairs

Selling Price: $380,000 (after renovations)

Selling Costs: $20,000 (realtor fee, closing costs)

Your Profit: $70,000 (one-time payday!)

High profit potential, but requires capital, time, and carries more risk than rentals.

How to Choose a Strategy

The good news? You don't have to choose! The analyzer shows you how profitable each strategy is for every property. Here's how to think about them:

Want Monthly Income?

Look for properties where the rental strategies (LTR, MTR, STR) show positive monthly cash flow.

Focus on green numbers in the cash flow section.

Want Big Quick Profit?

Look for properties where Fix & Flip shows the highest ROI (Return on Investment).

Focus on high ROI % in the Fix & Flip section.

Want Both?

Look for properties where multiple strategies look good. Analyze based on your local market.

Use the AI Verdict as a starting point.

Pro Tip:

The best deal isn't always the cheapest property. It's the one that aligns with YOUR investment goals and LOCAL market conditions. The analyzer helps you see which strategy makes sense for each property, but the strategy you choose should match your financial situation and time availability.

Next: Understand Financial Metrics