Are you thinking about investing in real estate, but feel unsure about what to invest in? There are a lot of investment opportunities out there, and it can feel overwhelming to choose which one is right for you.
Each type of real estate property has its own advantages and disadvantages, and it's important to have a good understanding of each option.
Keep reading to learn more about what the best type of real estate investment property is for you.
Residential Real Estate
Residential real estate is the most popular form of investing for beginners, and for good reason. It's easy to get into and there's very little long-term risk. Under the residential real estate umbrella, there are a few different options you can consider.
If you're looking for a great way to invest in the long-term, a single-family home is the best option. The long-term appreciation for these properties is almost always high.
In addition, you'll earn monthly passive income to cover the cost of the mortgage (if you have one), property taxes, and property management. You'll be making enough each month to cover those expenses and you can pocket the rest of the rent money.
Townhomes or Condos
If you're interested in investing in multiple units, townhomes and condos are a great option. You can buy a few units and rent them out to separate tenants. The upkeep with these properties is a lot easier but you'll have to pay heftier HOA fees to cover things like lawn care and landscaping.
Investing in a duplex is a cool idea if you're interested in living in one half of the duplex while renting out the other. The rent that the other tenants are paying can cover your mortgage payment so they are basically paying off the entire duplex.
Investing in an apartment building can be an incredibly rewarding opportunity, but it's something that should be done by an experienced investor. If you're just getting started in the world of real estate, stick with detached properties or townhomes and condos.
Commercial Real Estate
Commercial real estate offers investors an opportunity to make more cash in the short-term. You can also expect to have longer leases, shorter vacancies, and less competition.
Here are some commercial real estate opportunities you should consider:
- Office buildings
- Industrial buildings
- Shopping malls
While this can be a great opportunity, you should already be well established as an investor and in great financial standing before investing in commercial real estate.
Raw land is an attractive investment opportunity because it's generally a lot cheaper and you can score big if you invest in raw land that's in a popular or soon-to-be popular area.
If you see raw land for sale in an area with high potential growth, buying it up can get you a huge return on your investment. But oftentimes, raw land won't appreciate in value unless it's in a great location, so there's a lot of luck and instinct involved with this type of property investment.
Which Type of Real Estate Investment Property Is Best for You?
If you're wondering what the best type of real estate investment property is, it really depends on your experience, financial standing, and your goals. If you're just starting out with investing, it's best to start with residential real estate and work with professionals who can help you along the way.
Here at Professional Real Estate Management and Investment Services, we can help you find the best residential investment properties. We will also manage your property for you, so you don't have to worry about all the extra work that comes along with renting out a property.
Contact us today to learn more about our services and how we can help you achieve your investment goals.