There are all many types of investment property in Detroit that you could choose from. What is right for one person, may not be right for another! Find out what is right for you in our latest post!
Every person will be drawn towards different kinds of investments. The amount of time and money you are able to put into a property will help you decide how to invest. Below, we take a look at some of the most common real estate niches, so you can choose the one that is right for you!
Single-family rentals are the most common type of rental investment. Typically single-family homes are easily maintained and attract long-term renters as opposed to those renting apartments. Single-family homes are more easily resold and can be occupied by the owner down the road. The downside is that if your tenant moves out, your income from the property will be zero and you will have to cover the utility costs your tenant was previously paying.
Multi-family properties might require a little more work or a larger investment, but the rewards can be huge. Having multiple tenants is great as it is very unlikely they will all decide to move out at the same time, meaning you will always have income coming in from the property. However, more tenants mean more repairs, more complaints, and more time collecting rent. If you get the right tenants in place, these factors shouldn’t be an issue.
Anything over 4 units is considered a commercial property and will require different types of funding than your standard mortgage or FHA loan. An apartment building can require a good amount of maintenance and work to keep your tenants happy. Many landlords choose to hire a property management company to handle all of the day to day issues. This should be factored in before you decide to buy.
The biggest draw to wholesaling property is that you don’t ever have to buy a property in order to make money off of it. For a fee, you will contact potential buyers on behalf of the seller and assign them the contract. While the profits may seem slow at first, they can grow as your knowledge expands. Wholesaling properties isn’t for everyone, but if you are great at sales and networking, it could be an option for you.
While the trend of flipping homes has cooled down a bit, there are still plenty of profits to be made. To effectively flip a house, you should have some level of construction experience, a budget, and a plan. Know exactly how much time you have in order to resell the house in order to achieve a profit. It is wise to have a “plan b” just in case you aren’t able to sell the home in time. Many flippers have their profits eaten away by being stuck with the mortgage, utility costs, maintenance costs and the cost of listing. Factor these in when determining if a property will be a profitable investment.
Owning land is the easiest way to get into real estate investment. There is little to no maintenance. No bad tenants or repairs required, and you can get started with very little money comparatively. For a few thousand dollars you can find a nice lot, hold it or build, and turn that piece of dirt into cold hard cash.
The vacation industry is huge and more and more people are choosing to rent a house when they travel as opposed to staying in a boring and bland hotel. Many people make a living simply by being hospitable. In many cases, an owner can make in a week what they would make in a month renting to a traditional tenant.