With all of the new investments going around on the news, which is the best to get started with? As a whole, millionaires still agree that real estate is the best investment around for both new and experienced investors.
That's great, but what is the best type of property to invest in? Well, that's a different question. Let's talk about the most popular types of investment property and see which is right for you!
Rental properties are arguably the best type of investment property for several reasons. Not only will you earn semi-passive or entirely passive income, but you'll always have the property if you change your mind. You can always hold it and sell it for a profit if you choose.
These could be two-unit buildings or residential complexes. Either way, most of these investments are known as "turnkey" investment properties, and they're some of the most common types of property to invest in. However, they aren't the only ones.
There's nothing wrong with getting a discount on a property that needs some work, fixing it up, and then renting it out, as it may even help your profits! Let's say you buy a 2-unit property for $100,000 that needs $30,000 in work. That's a much better deal than buying a comparable turnkey property for $250,000 in the same area.
Either way, you'll need to ensure that the rental income exceeds mortgage, taxes, maintenance, and insurance to make it worth your while. If you want to see what will work out in your favor, use a rental property calculator for more specific information.
Flipping properties is a great way to earn one lump sum on the backend. If you want to generate a quick profit, then this is the way to go. Generally, you buy a house that needs some work, fix it up, and resell it.
Of course, the trick is finding the right property that will resell for a high enough value that it will cover the cost of renovations and still earn a profit. For this reason, you'll need to find the right location and the right inspector.
First, you'll find a location with high demand. This could be near a public transportation line, highway exit, or downtown area. Then, you'll need to get a thorough inspection of the building.
Ideally, you'll want to fix things like flooring, doors, paint, drywall, and landscaping issues. Not only are these cheaper than structural deficiencies, but you may be able to do them yourself, which could save you tens of thousands of dollars in labor costs.
Choose Your Favorite Types of Investment Property
Now that you know the different types of investment property, choose the one that's right for you and go for it! Remember, there's no shame in combining these two options or going with something completely different.
However, there's nothing like the help of trusted Oxford, MS real estate professionals, so stay up to date with our latest investment tips and feel free to contact us with any questions!