Different types of real estate investments and the main benefits
When it comes to real estate investment, you wonder which types of real estate properties you should invest your money in. The answer is simple; real estate investing offers different kinds of investment properties that suit various real estate angel investors‘ needs. Every real estate investment has its benefits and shortcomings. Here are the best types of real estate properties that you can invest in.
Single Family Homes
Single family homes are a dwelling that houses a single-family. They are most common in rural areas since land prices are much lower compared to urban areas. Single-family homes are the most favorite of all types of real estate properties because of its;
- High-demand; there is always a high demand for single-family homes even in the worst housing markets
- Easy to finance: it has a low down payment of at least 20% of the purchase price, so mortgage lenders are more than willing to invest your real estate investment.
- Affordable investment: single-family homes require less of an initial investment compared to other types of real estate properties
The only shortcoming of investing in single-family homes is that you have to take full responsibility as a landlord. Even if you can opt to hire a property Management Company that is not reliable as you always is available as a landlord
Multi-family homes are residential properties that include two separate housing units. These real estate properties are attractive for investment because of the high positive cash flow they generate. However, it’s more complicated to financing multi-family homes than single-family homes. They are not only more expensive investment but also qualify for a residential real estate loan -typically 20% down payment- A multi-family complex homes has to be four units or less
Townhouses residential properties are most common in urban centers. These properties‘ characteristics are small square footage per floor on multiple floors, usually 2-3 floors. Still, they can go up to 5Townhouses are cheaper than single-family homes because of their higher demand, but again it all depends on the local housing market.
A condo is a single unit within a large complex of apartments. The condos market is typically suitable for first-time buyers looking for a convenient residence with low maintenance and shared amenities like swimming pools, among others. Condos come with high fees ranging from $100 to $300, depending on the complexity. Buying multiple condos can be advantageous for large real estate investors since sellers are willing to drop prices for packaged deals.
Commercial Investment Properties
Instead of renting residential rental property for tenants to reside in, you can rent out a commercial property for people to operate their businesses. This is another essence of commercial real estate. Commercial real estate is excellent for start-ups because of its high return on investments. It’s estimated that most commercial properties have an annual return of 6-10% of the property price.
Turnkey properties are rental properties sold by individual sellers or companies that can be rented out shortly after purchase. This is an excellent choice for the property is performed by the company. This significantly reduces stress for investors like Erez Adani and is perfect for new investors, as they can still make high rental income with minimal management. Reduced obligations for the investor mean lower risk, another advantage for unique real estate investors.
Real Estate Investment Trusts
The real estate investment trusts are one of the ways to invest in real estate properties through companies. Like turnkey properties, they are also an excellent way for desiring investors to invest in real estate properties.
These categories of property are known for their high rental yields. This is because it’s a requirement by law for REITs to allocate 90% of their dividends to linked investors. Another significant benefit of REITs is high simple taxes. These properties are passive investments similar to that of turnkey properties, allowing you to make money while not being involved with the property.
Senior Housing Investment Options
There are many types of real estate investments you could consider when it comes to senior housing investment. However, the language used for different types of senior housing investments varies from region to region. For example, the term ‚assisted living‘ could mean one thing in one country and something different elsewhere. Typically, the different kinds of senior housing vary depending on the level of care provided.
Here are the most common senior housing investment options angel investors can venture on;
- Aging in place – This refers to a circumstance where a senior continues to reside in their current home. The home can be improved to address mobility matters, and some health care specialists can be called whenever needed. Aging in place is cheaper compared to any other senior housing option.
- Age-restricted communities – This is a housing option where residency is restricted to individuals of a particular age. Residents could live in apartments, condos, townhouses, or single-family homes. Age-restricted neighborhoods are designed to cater to people with specific interests.
- Assisted living – Residents in assisted living facilities have private bedrooms and bathrooms but share all other areas. Typically, such facilities provide laundry, meals, and transport to doctor’s arrangements, exercise, recreational activities, and housekeeping. They could also have beauty shops and entertainment venues.
- Nursing homes – These are facilities that offer solid medical care. Nursing homes provide transportation, laundry services, housekeeping, and meals; furthermore, they offer 24-hour medication management and supervision.
- Continuing-care retirement communities (CCRC) incorporate several types of senior housing options. For instance, a continuing-care retirement community could have assisted living facilities, nursing homes, and senior apartments within the same property. This makes it easier for residents to shift from one area to another as their needs change.
- Co-housing – There are two types of cohousing; general cohousing and senior-only cohousing. In each case, residents own their homes but share common areas like yards and community buildings. Mainly cohousing works a lot like a homeowners association.
Different types of real estate investments Conclusion
It is difficult to say which of the different types of real estate properties the best one for real estate investing is.
It all depends on the housing market in your area. These are the types of properties best suited for angel investors.
A particular style will be more appealing to you depending on your financial situation and goals.
Before investing in them, you will need to research these properties thoroughly.
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