Investing in real estate can be a great way to make money especially when we are talking about Investment Properties. There are a lot of people who will say it is easy. All you need to do is purchase, hold and take your rent cheques to the bank; however to find a successful investment property it may take a lot of research and a smart real estate team working on your behalf. Ways to make this process go smoothly is figuring out the type of investment properties you want to purchase.
Here are 5 types of income properties that I recommend for new and experienced investors.
Secondary Suites
Secondary suites is one of the easiest way to start investing in Real Estate and purchase your first of many investment properties. The best part of a secondary suite is that you do not need to buy a new house to become a real estate investor and a landlord. If you have a basement you can convert it into a legal apartment (depending on the laws in your area) and start making money from your existing home. An added bonus to a secondary suite is the money you are putting into your house should increase the value of your home. This is a WIN/WIN; you make money from renters and increase the value of your house.
Student Rentals
The words that make most investors run, however student rentals can be very lucrative and a way to make a lot of cash flow on your investment properties. Student rentals can be the most profitable properties in your real estate portfolio because with students you will normally find a group who will split the rent and rent the entire house themselves. If you had a group of 5 move into a house and one breaks the lease the other four are on the hook for that individual’s rent. Each student gets their own room, utilities are normally included in the rental price and if the house is in good shape and close to the University or College you should not have a hard time renting the house each year. Bonus If you get the right students in, you can have a tenant for 3 years.
Single Family Rentals
A single family investment property is a house or condominium bought with the intention of renting it to a single tenant. They are normally smaller properties for an investment property (not a multiplex), so they require a smaller investment. The benefit of a single family residences are that you will most likely attract as a tenant a young couple looking to start a family or a couple with young children who are looking to save money to purchase their own property. Treat the tenants well (welcome gifts, anniversary gifts) and the tenants can stay longer than the one year lease they signed. Buy, rent, hold and watch the value of your house increase.
Duplex / Multi family residences
These type of rentals are harder to add to your investment property portfolio, however when you do they can provide you with security of always having rental income every month. The benefit of a duplex, triplex or fourplex is that if one unit is vacant you still have other unit(s) paying you rent and ensuring that the property is creating a wealth of cashflow. An added benefit is you can live in one of the units and rent out the others therefore cutting out your mortgage payment while saving for your next investment property.
Vacation Property
Who does not want to have a property where you can enjoy using it while it makes you money. Vacation properties can be a dream come true. Winterize the vacation rentals to be able to increase your revenue and the ability to rent out the property during Thanksgiving and winter holidays. The risk with a vacation property is that there will be high turnover (most likely weekly renters) but rent it out properly and the property shall pay for itself and allow you to enjoy the property at the same time.