Categories Of Real Estate Investment

Categories Of Real Estate Investment



Categories of​ Real Estate Investment
Below are ten categories of​ real estate, and​ different ways to​ invest in​ them .​
The best one for​ you is​ something only you can decide, according to​ your particular needs .​
To help you do that, I​ list a​ couple good points and​ bad points for​ each type.
1 .​
Renting single family homes .​
Good points: An easier way to​ get started, and​ good long term return on investment .​
Bad points: Being a​ landlord isn't much fun, and​ you typically wait a​ long time for​ the​ big pay-off .​
You also lose all your income when a​ house is​ vacant.
2 .​
Fixer-uppers .​
Good points: Fast return on your investment, and​ it​ can be more creative work .​
Bad points: More risk (many unpredictables), and​ you get taxed heavily on the​ gain.
3 .​
Low income housing .​
Good points: Similar to​ any other rentals, but with higher cash flow .​
Bad points: Similar to​ any other rentals, but with more repairs and​ tenant problems.
4 .​
Selling rent-to-own houses .​
Good points: if​ you buy, then sell on a​ rent-to-own arrangement, you get higher rent, and​ the​ buyer is​ usually responsible for​ maintenance .​
Bad points: Bookkeeping can be tricky, and​ most tenants don't complete the​ purchase (this can be an​ advantage too, but it​ does mean more work for​ you).
5 .​
Commercial properties .​
Good points: Multi-year triple-net leases mean little management and​ high returns .​
Bad points: a​ tough market to​ break into, and​ you can lose income on vacant storefronts for​ a​ year at​ a​ time.
6 .​
Land, split and​ resold .​
Good points: Simpler than some real estate investments, with the​ possibility of​ great profits .​
Bad points: It can be a​ slow process, and​ you have expenses, but no cash flow while you wait.
7 .​
Boarding houses .​
Good points: You'll generate more cash flow renting a​ house by the​ room, especially in​ a​ college town .​
Bad points: You'll generate more headaches renting a​ house by the​ room, especially in​ a​ college town.
8 .​
Invest cash, sell with terms .​
Good points: a​ high rate of​ return is​ possible by paying cash to​ get a​ good price, and​ selling on easy terms to​ get a​ high price and​ high interest .​
Bad points: You need a​ lot of​ cash, and​ you tie up your capital for​ a​ long time.
9 .​
Invest, live in​ it, sell it .​
Good points: the​ tax law lets you fix it​ up, and​ sell it​ for​ a​ big tax-free profit after two years (if you live in​ it), then start the​ process again .​
Bad points: You may become attached to​ your investment, and​ you'll have to​ move a​ lot.
10 .​
Pure speculation .​
Good points: You can make large profits buying in​ the​ path of​ growth and​ holding until values rise, and​ it​ is​ a​ low-management investment .​
Bad points: Growth in​ value isn't always predictable, you have expenses with no income while you're waiting, and​ transaction costs can eat much of​ the​ profits.
There are many ways to​ invest in​ real estate .​
These ten are just to​ get you thinking about what is​ possible, and​ what type of​ investing suits your personality .​
Once you figure that out, you may want to​ look into other categories of​ real estate investment.




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