Real estate is an excellent way to diversify your assets and create a passive stream of income. If you’re looking to invest in real estate, you must know that there are so many different ways to do it. From purchasing a house and leasing it to finding a fixer-upper and even partaking in a real estate investment trust (REIT), there is something for every investor out there.
Even when it comes to staying simple and investing in local properties, you have a choice of what kind of property to invest in. By the end of this article, you’ll be aware of four different property types that you can invest your money in to make a profit.
Duplex
A duplex property is one that has two apartment units in one building. This is perfect for investors who want to become landlords and rent those apartments. These apartments often have separate utility hookups, making it perfect for finding two different tenants to live there.
This type of property is also ideal for people who want to house hack. House hacking is when someone buys a property, rents it out while living in a part of it, and uses the rent to pay their mortgage each month. Essentially, they’re living for free!
A duplex is perfect for house hacking because the owner can live in one of the apartments while renting out the other.
House Flip
There are so many rundown and outdated properties on the market that aren’t move-in ready, perfect for investors who want to make some fairly quick cash. Investors will purchase this property and renovate it to make it look completely new and modern.
Sometimes people take this on as a passion project and fix the house themselves, other times, they hire professional contractors like Brickworks Property Restoration to do some of the more specialized rehab.
Once the house is in good condition, the investor puts it back on the market at a much higher price than what they bought it for.
Turn Key Property
Investing in a turn key property is very similar to house flipping, but with one extra step. After renovating the property, the investor then finds a tenant to lease the property to. Once a tenant has signed the lease and moved in, the owner then sells the property to another investor who wants to be a landlord. That investor immediately starts making a profit by taking ownership of property that’s already being leased.
Commercial Property
Investing in real estate doesn’t mean you can only purchase residential properties. You can also purchase commercial properties and lease them to businesses. The benefits of this are that you can offer much longer lease terms and can structure the payment agreement so that you make a percentage of the business’s revenue or profits along with collecting rent.
So, if you believe you found an excellent retail or restaurant space and a business you really believe in wants to operate out of it, then you could definitely make an outstanding profit from your investment!