Investments are a way to get your money to work for you. They can lead you to your financial goals and build your wealth. There are several ways to invest your money, with real estate being one of them. This article will highlight tangible real estate investment strategies and how they can contribute to your financial success.
What are some real estate investment strategies?
You might be thinking of commercial space right away. But you can invest in residential real estate, too. There’s multiple real estate investment strategies for you to delve into. So let’s introduce them:
You may already own a home, or you’re on the path to owning one. Or, you enjoy the perks of renting but you want to invest in real estate. No matter what your living situation is, a single-family home is one of the greatest real estate investment strategies. A single-family home is a stand-alone residential building. It’s meant to be a single dwelling unit.
“Sometimes people look to rent a single-family home for the feel of privacy and extra space, or they really want that backyard,” Says Ben Flurey, General Manager at RPM Iowa.
We’ve talked about how to start building wealth through real estate investing before, highlighting how you can rent out your house.
A townhome is another optimal strategy. It’s typically owned by the resident and is within a community of buildings. One or more of the walls are shared with another townhome. They can be one story or multiple story homes.
Townhouses can be a part of Homeowners Associations (HOAs) who handle maintenance and things like lawn care for you. We’ll get into HOAs and how they might affect your investment strategy, but here’s a link to an article that highlights some things you need to know about Homeowner Associations.
One of the most apparent differences between a townhouse and a condominium is what you own. You personally own your individual unit when you buy a condo, but you share common areas, like a pool and yard space, with the other residents. When you purchase a townhome, you typically own the land that the home sits on.
“A duplex can be a great start because you can live on one side and rent out the other,” Flurey says. A duplex is a home that is designed to have two separate living spaces that share one or more walls. It will appear like a big house, but with two main access points.
A duplex can be a great starting point for new investors. And, you could DIY your own upgrades and be the landlord for your tenants next door.
Fourplex (or small multi-family)
Fourplex apartment complexes are a wonderful investment if you are looking to take out a conventional loan as opposed to a commercial. “If you want more than a duplex, but still want the convenience of a conventional loan, a fourplex is the best move,” Says Flurey.
You may want to consider hiring a property management company to handle all things that pertain to residents. If you’re living in one of the units, you’ll still have three others to attend to.
There are several pros to investing in a larger multi-family dwelling. For starters, it’s a great way to diversify your portfolio. Growing your portfolio would take you less time with a large multi-family building, too. Hiring a property management company or your own maintenance team makes economic sense because of the amount of units you will have with a larger multi-family.
How to pick the right real estate investment strategies
This series will take you through the pros and cons, return on investment, and how to add to your portfolio. We’re excited to discuss numbers and pave the way for you to reach your financial goals. Check back here to find updates on the series as we release new articles.