Types of Properties for New Real Estate Investors
Types of Properties: Not all real estate property types may be appropriate for new real estate investors. There are many factors to consider when making the decision to add real estate to an investment portfolio.
When deciding on a residential real estate investment strategy, some options for new investors to consider include:
Rental units can be considered both long term and short term investments. Types of properties that may be considered for this category would include:
* Detached single-family homes
Being a Landlord
Not everyone has either the desire or inclination to be a landlord. Dealing with tenant and property issues can be very stressful and time-consuming. One way to minimize the impact of being a landlord is to hire a professional property management company.
Hiring a professional property management company has several advantages:
* Allows owners of rental properties to be ‘shielded’ from dealing with tenant and property issues directly.
Professional property managers are well versed and prepared to manage tenant and property issues as they arise. They will typically take care of all issues relating to the property.
Many offer their services at reasonable prices and rates while others can be quite expensive depending on additional services being offered. You may expect property managers to provide the following services:
* Advertise properties available
Typically these are deducted and itemized from the rental income and will appear on monthly statements)
Flipping or The Bane of New Investors
Often times, new investors in real estate are overly anxious to ‘flip’ properties and make a significant profit. Rumors of how friends or acquaintances have made a lot of money is often the incentive for ‘flipping’.
The real estate market fluctuates greatly. Yesterdays great ‘flipping’ market may be (recent market trends as an example) tomorrows ‘Hold on to its market. While this is certainly a desirable quality of an investment property, it is and should not be the primary consideration for new real estate investors. The competition for this type of real estate investment is fierce and occupied by seasoned, experienced professional builders and investors
Let’s discuss the various property type which may be considered by new real estate investors.
The selection of the type of real estate property for investment purposes may be based on several factors.
These factors include:
* Financial considerations – How much can you afford?
Detached and attached single-family homes Single-family homes whether attached or detached are often the first real estate property type new investors seek. In many areas, they offer the most availability of any property type.
Prices obviously vary greatly with these property types as well.
Apartment units such as duplexes and triplexes should be considered as a viable option for new real estate investors.
Many investors and real estate professionals use apartment buildings as a point of entry to a portfolio of commercial real estate holdings and to build their equity before moving on to larger commercial real estate investments.
Duplexes, triplexes, and fourplexes are two, three and four-unit buildings that may or may not be owner-occupied.
Selecting an appropriate type of real estate property in which to invest is a primary consideration for all serious real estate investors.
Real estate investment strategies include the decision of whether or not to become actively involved in the management of the property. Professional property managers offer alternatives to assist in a “hands-off” approach to owning residential income property.
Knowing there are options on the various types of properties to purchase as the investment may provide new real estate investors the information needed to make that final decision to become a real estate investor.
What Are The Different Types Of Real Estate Investments?
These generally include real estate crowdfunding, investing in real estate investment trusts (REITs), and tax liens. Each of these alternative investments has its own risks and rewards and are generally right for different kinds of investors.
What Are The 4 Types Of Investments?
There are four main investment types, or asset classes, that you can choose from, each with distinct characteristics, risks, and benefits.
What Are Good Real Estate Investments?
If you’re wanting to expand your investment horizons, here are 5 different ways to invest in real estate.
What Is The Average Return On Real Estate Investment?
The average return on investment differs based on property investment strategies. Residential real estate has an average ROI of 10.6%, commercial real estate has an average return on investment of 9.5%, and REITs have an average return of 11.8%.