When you decide to make an investment in Detroit real estate, there are many options you can choose from. Each type of property will perform a little bit differently and require a different level of commitment. What works for one investor might not work for another. The goal is to find what works for you! In our latest post, we will discuss many types of real estate so you can determine what type of property is right for your portfolio in Detroit!
Congratulations on your decision to invest in Detroit real estate! Buying and selling homes has created more millionaires than any other method. People need housing, and this need isn’t going anywhere! Learn more about the different types of real estate available to you in Detroit!
Land is an often overlooked way to diversify a portfolio. There are many ways to make money through land investment that you might not have considered. You can buy and hold in a developing area, selling when the time is right. You could buy a large parcel of land, subdividing it and selling the lots out individually for a profit. Or you could buy and develop the land yourself, turning a patch of dirt into a profitable piece of real estate. Some of the best investors have seen the potential in a piece of raw land and capitalized on it!
Single-family homes often procure some of the highest returns for landlords. Typically, tenants will live in a house for a longer period then they would an apartment. Higher tenant retention means more money in the bank for you. Single-family homes are a very popular invent choice for many people.
When you purchase a property strictly as an investment, it can be more difficult to secure the funding you need. Many investors begin by purchasing a multi-family property and living in one of the units. When you purchase a property that is 4 units or smaller, you can still use an FHA loan. For 3.5% down, you can quickly purchase a 4-plex and begin collecting rental income right away. Once you have lived in the unit for two years, you will then have the option to rent out the entire building.
Typically, an apartment building is best for someone who has some experience in real estate investment. With multiple tenants, you will have more maintenance and turnover to worry about. You will need to keep your tenants happy all while keeping an eye on your overhead costs.
Some investors prefer to own commercial properties. Businesses tend to move less frequently than a home renter would. The primary concern would be the business staying open for a good amount of time. Businesses open and close their doors every day, and you should be prepared for the volatility of a commercial building.
Mobile homes are a niche market that can prove to be very profitable for some investors. Not many people can see the profits in owning a mobile home, however, buying and flipping or buying and renting to long-term tenants can be a great source of income. There is typically a smaller market with this property type, so you will have less competition when a great deal comes along.
When you invest in a REIT or Real Estate Investment Trust, you are pooling your money with many others in the hopes of achieving a common goal: profits. REIT’s can be very profitable, all while requiring little to no work from you. It is a great choice for investors looking to build wealth using a hands-off approach.