When 90% of millionaires own investment real estate, you can't argue its effectiveness at generating wealth. However, not all of us have extra cash to buy a ton of real estate. When you have a limited budget, you must make the most of your purchase by focusing on the best property types.
Look for these real estate types to invest in to increase your wealth.
Single Family Home
One of the best property types to invest in is the most common. Single-family homes are easy to find in almost any market, making them easier to purchase. Especially when finding the right property is the biggest obstacle for 53% of buyers.
It is also easier for an individual to secure financing for a single-family home. Lenders are more likely to work with individual buyers to secure the purchase of a second or third home.
Because these homes are so prevalent, you can find a range of price points and conditions. For some, older homes are ideal because you can repair, update, and flip for a higher price. For others, turn-key homes are attractive because you can immediately begin renting after purchase.
Instead of investing in a single home where you would have one tenant, a multi-family residential building creates more opportunities for monthly income generation. Purchasing a new building for apartment rentals can allow for positive cash flow before repair and maintenance costs rise.
Securing financing can be more difficult for multi-family buildings. Because of this, there is less competition, making purchasing easier for those who can afford it.
A townhouse is a smart choice if you are looking to invest in an urban area. These properties do not take up a large footprint but offer plenty in terms of floorplan and number of tenants. They range in size from two to five floors.
Townhomes do not experience as high of a demand as single-family homes, so finding a good deal tends to be easier.
Unlike the other real estate types on this list, a condo is a single unit in a much larger building or complex. In some urban areas, condos can command a higher price than single-family homes. They also provide an avenue for investing in urban areas where land is at a premium.
What is nice about condos is that they come with many amenities that make the condo more enticing for potential tenants. Investors can also purchase more than one condo. This allows for easier management of multiple condo properties in the same building.
Consider These Property Types
If you are ready to invest in real estate, consider one of these four property types. Not only are they readily found, but they are also primed for generating monthly income. Of course, the type that is right for you will depend on location, investing goals, and budget.
Request a market rental analysis of your real estate investment and find out how profitable your property could be.