Ever since the 2008 housing crash, many Americans have been apprehensive about investing in real estate. But thanks to various new investment opportunities, the truth is that real estate is still a great option for folks looking to build wealth.
The key is knowing how to spot the best opportunities investing in property. Here are some factors to consider when looking to make money in real estate.
Why Real Estate is a Good Investment
Before we look at ways to spot investment opportunities, let’s take a closer look at real estate in general. Why is it considered such a good investment?
For one, there are several ways to make money in real estate. You can rent out the property, restore it, and build equity in it. Additionally, real estate, unlike other investment options, gives you the benefit of a physical property.
Making Your Vacation into an Investment
One great way to start investing in real estate is by purchasing a vacation home. When you are not using the property, you can rent it out to other vacationers.
A vacation rental is a great option because it offers higher returns than residential renting. In popular areas, you can charge more than the cost of the monthly mortgage to rent the property for just a week.
This makes a vacation home one of the best ways to turn your vacation into an investment. Are you wondering, “Why are timeshares bad?
One of the main reasons is that it lacks the same rental potential. This is because you typically only have access to your timeshare for one week out of the year.
Another great way to increase your rental potential with your property is to invest in a multi-family property, like a duplex or apartment building. Instead of just collecting one check from one set of tenants every month, you will have multiple checks coming in. This way, if you have a tenant move out, or a tenant late on the rent, you do not lose all of your income for that month.
Commercial Real Estate
Many folks getting started with real estate investment assume that purchasing and renting residential properties is the best way to go. But there are actually significant opportunities in renting to commercial tenants.
For one, commercial tenants tend to be more reliable than residential ones. This is because, as long as their business is going well, you know that they have a steady stream of income.
Also, commercial tenants have more of a vested interest in keeping the property in good shape. If the property does not look good, it will drive customers away. This protects your investment.
Taking Advantage of New Investment Opportunities
With these tips in mind, you will be on your way to finding great new investment opportunities. This will help you get out of debt and get on your way to financial freedom.
Have you invested in real estate? What strategies do you use to spot good opportunities? Let us know in the comments!