For investors looking to scale up their investment portfolio, the BRRRR strategy is a game changer. Without needing to tie up a huge capital, this strategy helps investors to sustain themselves in the real estate market. It’s like investing smartly and making the most out of your investment.
But what exactly is BRRR? Let’s decode this acronym and the steps involved in this strategy:
B for Buy
The initial step is to find and buy a property with potential for appreciation. The motive should be to buy property below market value to maximise returns.
Buy from auctions, get hands-on off-market properties, probate properties or fixer-upper ones. While property condition and location both matter in the BRRRR strategy, more emphasis should be given to the location.
R for Rehab
Since an individual has bought a property at a lower market value. It’s time to renovate it and add value to the property. It may include modernising the kitchen, repairing taps, or just redesigning the interior. Rehab leads to higher rental yields and long-term capital appreciation.
R for Rent
Now the property is fresh and new, it’s time to rent it out. Queensland’s rental market is strong and finding tenants who will pay rent on time is crucial for consistent income. Renting out property can help to cover your expenses and build equity over time.
R for Refinance
Once the value has increased due to your renovations, refinancing allows you to pull out the equity. With the higher value, you can pay off the initial mortgage and keep the property while using the funds to buy another.
R for Repeat
The more you repeat the BRRRR strategy, the more properties you’ll acquire and diversify your portfolio. Thus, the power of leverage comes into play as you reinvest funds into new properties. Pat yourself and repeat this cycle, refining your approach with each cycle.
So, there you have the BRRRR strategy.
This approach empowers real estate investors to build wealth and expand their portfolios.
However, as a beginner, navigating its intricacies often requires expert guidance. That’s where Sapphire Real Estate steps in, helping you strategically buy, rehab, rent, refinance, and repeat this technique for optimal returns.
