Real estate investments offer a great opportunity to make passive income every month. Regardless of what type of property you choose to invest in, you could potentially establish a nice consistent monthly income that will pay when you want to opt-out.
How to go about setting up an investment can be tricky. Here, we will explore three of the most common types of properties in which you can invest. Each property type comes with a unique set of advantages and disadvantages. The risks and rewards associated with each vary, but their potential is universally undeniable.
Commercial Real Estate
Commercial real estate is the most expensive option, but in some ways, the least work. Unlike residential leases, you can set a contract for years. Your renter is also likely to find that proper maintenance of the property is also in their best interest.
The high buy-in for commercial real estate, however, can make it prohibitive. If you find there is an excellent location that is within your price range, it is worth considering because this high buy-in can lead to significant returns on the profit as well.
While this is good advice for anyone considering such large-scale investments, it is worth consulting with an expert to judge potential properties. Unless you are trained in valuing business locations and structures, you will likely find that investing in some assistance also ends up being worth it.
Multi-Family Real Estate
Multi-family real estate can have a similarly high buy-in to commercial real estate, but it offers its own set of challenges and rewards. For one, owning a sizeable multi-family building can be a full-time job.
When you are considering purchasing an investment property, it is essential to consider how much involvement you want post-purchase. Many investors do not find they have the skills or desire to work as a landlord. While some will find it fulfilling work, it is not a decision you should take lightly.
If you are not interested in being the landlord and owner, consider hiring a property manager. They will help you fill empty rooms, collect rent, and handle repairs. With their help, you will be able to enjoy the benefits of a substantial investment and steady monthly income without the hassle of an extra job.
Single-Family Real Estate
Single-family real estate investments are often the most affordable option. They are also the most versatile. Depending on your skills, time, and desired level of risk/commitment, you can flip a home, run it as a rental, or manage it as a vacation accommodation (though the latter will require you to obtain a permit).
Regardless of what you choose to do with it, a single-family property is an excellent choice for anyone who has enough to invest but isn’t looking to take a significant risk. As always, you can consult with a professional about the specific trends in each neighborhood, which will help you maximize your return on investment.