When just starting out in real estate investing, many investors are unsure as to what type of property to focus on. In order to determine the best type of property to purchase, however, the answer will depend on the goals that you have set for your investing overall, as well as the amount of time – if any – that you want to spend on property management.
Overall, there are some properties will be better suited for profit if they are to be rehabbed and quickly “flipped,” whereas others are better prospects for long term buy and hold investment strategies.
If you plan to focus on rehabbing and flipping property, then the best type to do this with is single family homes. This is because these properties typically appeal to the widest market. Therefore, once you have fixed the property up, you are likely to have more potential purchasers.
In addition, single family properties are also the type of property that sells the fastest. For this reason, they are usually the easiest type of property to finance – especially in comparison to condominiums.
For investors who are seeking more of a long term incoming cash flow as a rental income, then a multi-unit property may be the best option. Because of economies of scale, you can typically purchase these types of properties for a lower price per unit.
Also, if you own multiple units, you will still have some incoming cash flow – even if one of the units is vacant at any given time. In this case, you won’t have to go completely without income during a particular period of time. However, single family properties will typically net you longer term tenants, so there is a definite tradeoff. For those investors who seek even longer term tenants, commercial property may also be another way to go.
Regardless of the type of investment property that you plan to purchase, you should consider using a property management company to handle all of the day to day tasks and property management duties. In doing so, you can free up a great deal of time in order to concentrate on other things.
What type of Investment Property should you purchase? Give us a call. We can provide you with more details on the advantages of the different types of property to purchase in terms of what it is that you’re seeking in a specific investment.