Most people are fully aware that there are a LOT of ways to make money in real estate. Very few people, however, have any idea on how to get started in doing so, as an investor. One way to go about your impending investment assessment is to take a 10,000 foot view and filter your property investment options into standardized categories. The benefit of actually funneling potential investments into silos by type is that it makes it far easier to compare and contrast performance criteria, each: actual, projected, and desired.
These are the 5 main categorical types of real estate in today’s market. While this is solid information, no matter what anyone ever tells you…when it is all said and done, you should to decide for yourself, which category provides the best strategic investment opportunity for you.
1 : LAND SPECULATION
Buy some land that you think will appreciate with time, based what you know about the land itself, or the surrounding area of that land.
2 : SINGLE FAMILY HOMES
Buy a house that you either think will increase in value or you think you can rent it out for more than it costs you. This is what we call this positive cash flow in the biz. Some people will buy several single family homes and actually make more money from this than they do from their 9-5 jobs! (Seriously.)
3 : MULTI-FAMILY HOMES
Commercial buildings (5+ units)
All of these property types are all really neat investments that allow you to have people (with separate leases) rent units in a singular building, from you. This has the potential to result in a much greater per building profit than a single family home ever could. However…there is generally much higher risk involved and much greater overhead.
4 : INDUSTRIAL PROPERTIES
You could buy a building, like a warehouse or a manufacturing facility, and sell it to a business. They will then (of course) be obligated to pay you rent so that they can make their widgets in your space (or whatever it is they do).
5 : RETAIL SHOPS
Or, you could invest in a big strip mall and try to get a bunch of retailers in there. These days, they have these really cool things called triple net leases where the tenant is responsible for real estate taxes, building insurance, and maintenance (the three “nets”) on the property, in addition to any normal fees that are expected under the agreement (rent, utilities, etc.). Crazy, right?!?
– – – > So saith The JD PALLAS REALTORS ®