Looking to invest in real estate? It’s important to know the different types of homes you can buy for good returns. Each type has its own advantages. Whether it’s a single-family house, a condo, or even a vacation rental, they all offer chances to make money. In this article, we’ll talk about the best types of homes to invest in for making the most profit.
See also: Real estate or stocks: Which is a favourable option for investment?
Single family homes
Single-family homes are like the basic choice for investing in property. They can bring in good rent money and their value can go up over the years. Plus, if you own one, you can fix it up to make its worth even higher. So, it’s flexible for investors. With a single-family home, you’re only dealing with one tenant or family, which can make things simpler. Overall, they’re a solid option for making money in real estate.
Source: Pinterest
Multi-family homes
Multi-family homes, like duplexes or triplexes, have more than one living space in the same building. You can rent out each space to different tenants, which means more income from one property. This is great for investors who are looking for high ROI without much risk. With multiple tenants, you have a better chance of always having rental income coming in. Overall, it’s a smart choice for increasing your earnings in real estate.
Source: Pinterest
Condominiums (Condos)
Condos are a nice choice for investors who don’t want to deal with maintenance issues. When you own a condo, you usually pay fees to the homeowner association (HOA). These fees cover things like taking care of the outside of the building, keeping common areas clean, and sometimes extras like pools or gyms. So, you don’t have to worry about fixing things yourself. It’s a good option for investors who want a more hands-off approach to property ownership.
Source: Pinterest
Townhouses
Townhouses are like a mix between single-family homes and condos. They’re usually connected to other units and have a few floors, maybe even a small yard or patio. For investors, townhouses can be a good choice because you get some of the perks of owning a home without having to take care of a big property. So, if you want to invest in real estate but don’t want all the upkeep, townhouses could be a great option.
Source: Pinterest
Fixer uppers
Fixer-uppers are homes that need fixing before they’re ready to rent out. Investors buy them for less money because of the repairs needed. Then, they fix them up to make them worth more. But this takes a lot of money and work upfront. Still, it can be a good way to increase the value of the property and make more money in the long run.
Source: Pinterest
Student housing
Student housing properties are found close to colleges or universities. They’re great for investors who want a regular income from renting to students. But, sometimes, these properties can have more empty rooms and might need more fixing because students can be hard on them. So while they can be a good investment, they also come with some risks.
Source: Pinterest
Short term rentals
Short-term rentals, like vacation homes or Airbnb properties, can bring in more money than long-term rentals. But they need more effort from the investor, like handling bookings and cleaning after each guest leaves. So while they can be more profitable, they also require more work.
Source: Pinterest
Mobile homes
Manufactured homes, commonly referred to as mobile homes, offer a cost-effective entry into the real estate market for investors. These properties often have lower purchase prices compared to traditional homes, making them accessible to investors with smaller budgets. While they can provide an affordable investment opportunity, it’s important to note that manufactured homes typically appreciate in value at a slower rate than traditional houses. Despite this slower appreciation, investors can still benefit from rental income and potential appreciation over time, especially in areas with high demand for affordable housing options. Therefore, investors should carefully consider the potential returns and long-term appreciation prospects before making a decision.
Source: Pinterest
FAQs
Location, property type, potential rental income, appreciation potential, and ongoing maintenance costs are all crucial factors to evaluate.
There's no one-size-fits-all answer. Short-term rentals can yield high income, but require more work. Fixer-uppers offer high potential appreciation, but require upfront investment and effort.
Short-term rentals require active management, including guest communication, cleaning between stays, and potential linen changes. Consider hiring a management service if needed.
Manufactured homes offer affordability but have lower appreciation rates compared to traditional homes. Research financing options, as traditional mortgages might not be readily available.
A qualified real estate agent can help you find good investment opportunities, negotiate deals, and navigate the buying process. What are the key factors to consider when choosing a residential real estate investment?
Which type of residential real estate offers the highest potential return on investment (ROI)?
How much time and effort does managing a short-term rental property require?
Are manufactured homes a good option for real estate investment?
Should I consider hiring a real estate agent when investing in residential property?
| Got any questions or point of view on our article? We would love to hear from you. Write to our Editor-in-Chief Jhumur Ghosh at jhumur.ghosh1@housing.com |
