If you have made up your mind to start real estate investing, knowing how to invest in real estate is the next step. There are plenty of types of real estate investments, and you may wonder which ones are the best real estate investments for you. Of course, the ‘best’ is related to your objective from the investment. Do you want a stable and constant but small cash? Or do you aim to make a fortune in a short period of time? Let’s explore types of investments to decide on the best real estate investments.
Traditional Residential Investments
One of the most common and one of the best real estate investments is traditional residential properties since many dream of owning a property that they can rent out and collect a monthly rental out of it. This type of investment is good for real estate investors who aim to rent out their properties for a long time, and it’s one of the constant ways to make money. After a long period of time, successful real estate investors usually plan to sell the rental property at a higher price than the purchase price. Typically, they do so in order to buy a larger property and start the cycle again with a higher profit.
Needless to say, there are countless types of properties. They vary since people have various lifestyles, and each person searches for the optimal income property for him/herself. Traditionally, single-family homes were one of the first real estate investments, in which the landlord rents out an independent house for another family or a group and maintains a constant monthly rent out of it. Nowadays, people can rent out rooms in their houses for additional income. Another alternative is to rent out the house, while renting a cheaper property to live in and gain some cash.
Multi-family homes are another housing option. They mean that there are several housing units that share the same building or complex. There are apartments as well, which are self-contained housing units that form only a part of a building, a tower, or a complex. Another option is townhomes, which are queued housing units that are individually owned but connected to each other. Condos are separately owned housing units, which are parts of a big real estate property and that have joint-owned areas like yards and exteriors. It’s worth mentioning that each one of them has a different legislation regarding the ownership and the lease.
Confused which one is the best real estate investment? Of course, it varies from one state to another, and even from one neighborhood to another. Here comes the challenge for a real estate investor to choose the best real estate investments. A successful real estate investor knows that there is a need for an investment property calculator to do calculate all the basic calculations regarding the property. Mashvisor analytical calculator helps you to identify the possible investment opportunities in a certain neighborhood and calculate the return on investment, the rental income, the cap rate, the cash on cash return, and many other calculations for every single choice. This helps you compare the choices and decide which one is the optimal income property for you.
Related: How to Use Mashvisor’s Rental Property Calculator
Airbnb Residential Investments
One of best real estate investments nowadays is Airbnb. The Airbnb domain is dramatically growing day after day, especially that more people are interested in the idea of renting or renting out for short terms. The same kinds of traditional housing options are available for Airbnb investments and, as a result, the same way of choosing the best real estate investments should be followed. A trusty and comprehensive analytical tool should be used by real estate investors not only to choose the best property but also to compare the traditional vs. the Airbnb rental strategy for each rental property and decide which one to follow. Mashvisor investment property calculator can manage all that for you.
Related: Real Estate Investing: Traditional vs. Airbnb Investments
Commercial Real estate investing
You may consider buying a property to rent out to companies or small business owners, and you can enjoy a range of advantages over renting it for residential purposes. It’s one of the best real estate investments for several reasons. First of all, commercial properties will most probably be occupied by the same company for a long term simply because no company aims to change its address constantly. Consequently, you will have a more constant cash flow for a long period of time which may allow you to cut plenty of expenses over marketing and legal procedures of a new tenant. The maintenance costs as well will be lower. Secondly, business owners will most probably pay the rents on time, more than the regular tenants.
Fix-and-Flip
This kind of real estate investment is also considered one of the best real estate investments since it depends on buying investment properties that need slight maintenance and modification (fixing) before being sold back. Once real estate investors make some good cash from one investment, they use this cash to start a larger one, until they have several investments at the same time. The secret of successful real estate investors who invest in fix-and-flips is that they buy the properties carefully with prices below the market price and then sell them above the market price. This is one of the best ways to get rich in real estate investing, but it involves risks and requires a range of skills. It’s worth mentioning that this strategy can be used for all types of properties.
Related: 5 Tricks To Save On Fix-and-Flips
Real Estate Investing Group
Do you want to join the real estate domain but don’t want to dedicate a lot of time and efforts to the process of being a landlord, and taking care of an income property? There is a chance for you by joining what is called a real estate investing group. In this strategy, a company purchase a building or a tower and takes care of all maintenance, legal follow up, and all other management missions. Real estate investors can buy units from this property from the company in exchange for a percentage of the rental income that the real estate investor can gain from his/her unit. And yes, If it’s handled well, it’s one of the best real estate investments.
The Bottom Line
All the above-mentioned investment strategies are among the best real estate investments if they are planned and implemented properly. With the right knowledge and the right analysis tool, both the beginner and the expert real estate investor can use them and make a good fortune.
For more advice on all aspects of real estate investing, keep reading on Mashvisor.