Inventions and Gadgets
Real Estate Investments
Categories of Real Estate
Below are ten categories of
real estate, and different ways to invest in them. The best one for
you is something only you can decide, according to your particular
needs. To help you do that, I list a couple good points and bad
points for each type.
1. Renting single family homes. Good points: An easier way to get
started, and good long term return on investment. Bad points: Being
a landlord isn't much fun, and you typically wait a long time for
the big pay-off. You also lose all your income when a house is
2. Fixer-uppers. Good points: Fast return on your investment, and it
can be more creative work. Bad points: More risk (many
unpredictable's), and you get taxed heavily on the gain.
3. Low income housing. Good points: Similar to any other rentals,
but with higher cash flow. Bad points: Similar to any other rentals,
but with more repairs and tenant problems.
4. Selling rent-to-own houses. Good points: If you buy, then sell on
a rent-to-own arrangement, you get higher rent, and the buyer is
usually responsible for maintenance. Bad points: Bookkeeping can be
tricky, and most tenants don't complete the purchase (this can be an
advantage too, but it does mean more work for you).
5. Commercial properties. Good points: Multi-year triple-net leases
mean little management and high returns. Bad points: A tough market
to break into, and you can lose income on vacant storefronts for a
year at a time.
6. Land, split and resold. Good points: Simpler than some real
estate investments, with the possibility of great profits. Bad
points: It can be a slow process, and you have expenses, but no cash
flow while you wait.
7. Boarding houses. Good points: You'll generate more cash flow
renting a house by the room, especially in a college town. Bad
points: You'll generate more headaches renting a house by the room,
especially in a college town.
8. Invest cash, sell with terms. Good points: A high rate of return
is possible by paying cash to get a good price, and selling on easy
terms to get a high price AND high interest. Bad points: You need a
lot of cash, and you tie up your capital for a long time.
9. Invest, live in it, sell it. Good points: The tax law lets you
fix it up, and sell it for a big tax-free profit after two years (if
you live in it), then start the process again. Bad points: You may
become attached to your investment, and you'll have to move a lot.
10. Pure speculation. Good
points: You can make large profits buying in the path of growth and
holding until values rise, and it is a low-management investment.
Bad points: Growth in value isn't always predictable, you have
expenses with no income while you're waiting, and transaction costs
can eat much of the profits.
There are many ways to invest in real estate. These ten are just to
get you thinking about what is possible, and what type of investing
suits your personality. Once you figure that out, you may want to
look into other categories of real estate investment.
Steve Gillman has invested in real estate for years. To learn more,
get a free real estate investing course, and see a photo of a
beautiful house he and his wife bought for $17,500, visit
Article Source: EzineArticles.com expert: Steven Gillman