The property market is always worth keeping an eye on to find great investment opportunities. But, when it comes to real estate, what property types are the best investments?
Generally, you can filter the options into three categories:
Residential properties include any property types that people live in. Some typical ideas include houses and apartments. But, you can also include static caravans, lodges, condos – and many other options in this category.
Why are residential properties good investments? Because people are always looking for somewhere to live. Renting out these investments will always ensure you attract tenants, meaning money can be made every single month. However, residential real estate is also the best for flipping. This is when you buy a house or apartment, improve it to increase the property value, then sell it for a profit. The best property flippers can do this all within a few months, flipping numerous properties a year and earning big returns.
Commercial properties are used by businesses to run their operations. A few of the most obvious examples are office buildings, retail units, restaurants, and so on.
What makes commercial properties a sound investment for you? Again, the potential to make money through renting out these properties is astounding. In fact, the rental potential is even better than that of residential property because you can charge businesses higher rates. Also, owning an office building can mean you have multiple commercial tenants paying you a lot of rent, supercharging your earnings. Of course, you also need to take into consideration the fact that small businesses are always cropping up, looking for places to rent. So, if you can own some commercial real estate, you’re bound to find tenants with ease.
Lastly, you have industrial real estate, which is similar to commercial in that these properties are used by businesses. The difference is that industrial properties are much bigger and tend to include warehouses, factories, storage lots, and so on.
Are these properties good investments? Yes, much like commercial real estate, you can charge very high rates for businesses to rent these properties from you. However, the unique thing about industrial real estate is that it is often used to develop residential properties. You can invest in a large old industrial building, but turn it into a block of apartments. We’re seeing this more and more, and it means you can invest in industrial real estate but see the benefits of residential real estate investments!
Keeping all of the above in mind, which type of property is the best to invest in?
In short, there is no property type that wins out over the rest. In fact, the smartest investment choice is to have a range of real estate investments that span all three of these categories. This way, you can enjoy the benefits of residential property flipping alongside the high rental rates you get from commercial and industrial properties. It’s important to avoid boxing yourself in whenever you invest in something. Diversity is the key to a thriving property portfolio.