Real estate investment is a strong source of passive income and a way to grow your wealth. You’ve probably heard this before. Despite how often this piece of true financial wisdom gets tossed around, it’s not as common for people to talk about what that actually looks like.
In reality, there are a lot of different ways to invest in real estate. The amount of money you’ll need, the amount of time you’ll need to invest, and many other factors make these strategies completely different.
What type of real estate investment will work best for your life and your finances?
You’ll need to learn more about your options so you can choose the right one for you.
You Can Invest In Vacation/Short-Term Rental Property
You can purchase a property and then rent out a room or the entire building to people in need of short term housing. Renters may be on vacation or on a business trip or they are moving to the area.
Most people these days who do this type of rental will use a service like Airbnb to market their property.
If your property is popular, you can make more money renting out short term than you could with a long term renter. While this can help you increase your profits, it also requires a lot more time investment. You can hire someone else to manage your rental, but that will lower your profits, so you’ll need to estimate how that works out for your property.
Create a Self-Storage Business
People are moving. They want their homes to adopt a minimalist lifestyle, but they are unwilling to get rid of their stuff. Whatever their reasons, people are using self-storage facilities more to keep their belongings safely off their own property.
When you run this kind of business, you won’t have to deal with the problems that come with having tenants to take care of, which is a huge plus. You will need to make sure you hire someone great to handle the customer service for your business, but when done well, this can work out for you.
Rent a Single Family Home
Many first time investors chose this as a path to investing in real estate. While it’s a simple way to invest, any time your property is vacant, you will have no income coming in.
Invest In An Apartment Building
Owning an apartment building can be a big job. This will take a lot of management because you have so many tenants.
If your property is popular and your tenants tend to stay a long time with little turnover, you can create a steady source of income. In fact, once you’ve built a history like that, the value of your building will increase if you wish to sell in the future.