So, you’ve decided that you want to invest in property. Well, congratulations, because you’ve already made one smart choice, but there are still some questions you need to answer. Indeed, one of the worst moves you can make as a new property investor is to think of all property types as equal (they’re not).
Today, we’re going to go through the pros and cons of the most common property types, so you make the correct decision the first time around.
Traditional family homes are a common property investment. Besides the fact that it might be a place for you to live and raise a family, family homes will also hold their value reasonably well. New homes will always do better than older home in most cases, and modern amenities will attract buyers.
However, if the house is a fixer-upper and will require you to put in some elbow grease and some extra investment, it might not be the most profitable choice.
If you aren’t ready to dive all-in into a full-sized home, a townhouse might be the choice for you. These are typically older and might require a little TLC. Whether you choose to live there or rent out to tenants, these homes can be a tremendous long-term investment choice, especially if the location is right.
One thing to consider is that because these homes might be generally more affordable than their full-size counterparts, the ROI might not be as great either. If you’re in it to strike it rich from investing in a house, you might want to look elsewhere.
Apartments and other multi-family investment properties are one of the safest investments you can make. If you’re renting out a single home, losing one tenant could mean no income for months. With an apartment building, you have more stability. The only downside is that they can typically cost much more up front, and require constant maintenance.
Retail presents many profitable opportunities. There are a few different types to look for on the market, each with their pros and cons. The larger shopping centre types are suitable for multiple businesses. If you invest in the building, this means you’ll have higher up-front costs, but you can make that cost up and more through the leases of multiple businesses.
Stand-alone retail locations typically house just one business and are cheaper to buy up-front. The problem is, the location might not be right, and if that business leaves, you’ll be stuck searching for a suitable renter to take their place.
Ah, the idea of investing in a vacant lot is an appealing one, isn’t it? This option presents many potentially profitable possibilities, but there are some things first to consider. To start, they are usually more affordable than buying a building. If you compare a vacant lot to a building in the same location, the building will always add more value.
If you have your sights set on developing the lot, then you have the flexibility of a clean slate. If you don’t, the drawbacks start to come into play. For one, it can typically be harder to sell a vacant lot than to sell a building, and you might not make much money on the investment unless you hold it for the long-term. If you’re in it for the long haul or want to make a building of your own, developing a lot might be for you.
Ready to jump into the big pool of investment properties? Schedule an appointment with Adpen today, and we’ll help answer your questions and get you started off right.