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Types Of Income Producing Real Estate

Jul 08, 2021

Real estate properties can provide great benefits, whether for great investment opportunities, for personal use or for generating income. Investing in profitable income-generating real estate property can help you get monthly payments in the form of tenant rent or expenses through additional revenue streams and appreciation in the market price.


Investing in real estate property can offer significant advantages. However, with the available choices deciding the right one is challenging. If you’re interested in investing in real estate properties to generate income, here is a guide that simplifies things to help you. Here are the most popular options you can consider for investments.


  1. Single-family homes

These types of homes are popular rental properties that a beginner real estate investor goes for. This is because investing is super easy, they are also affordable, and financing single-family homes are pretty much more accessible finance. This is because the property cost less, which means one gets to enjoy lower down payments for traditional investment property financing.

Single-family homes actually can be a high-income-generating real estate asset as there is no professional property management aspect. You can easily manage your properties. This will help save money on rental property expenses and will increase your net income.

This real estate property is a perfect choice for long-term traditional rentals as the tenant sees them as homes but not temporary residences. This means you can stay relaxed for a long time before searching for another tenant. In simple words, you will enjoy low vacancy rates and continuous rental income.


  1. Multi-family homes

These types of real estate properties are very easy to manage and operate because of the closeness of the unit, which means a lot of travel is not required to reach your investment properties. 

The shared facilities offer great convenience for maintenance and repairs. In order to improve your real estate investment portfolio quickly, the best way to do it is to invest in multi-family homes. You can purchase several income-generating real estate assets in a single process.


  1. Studio apartments

The demand for studio apartments has increased dramatically as the young generations today reside in rental properties to save for their dream home. It offers a cheaper and more efficient space for leaving, especially when they are a college student. Therefore, investing in an area around a university or college campus can be highly beneficial for you.

Other advantages of investing in a studio apartment ar: low maintenance, affordability, future utilities, and short-term rentals. If you are considering Airbnb, ensure to choose a location near a tourist destination.


4.Apartment buildings

Investing in apartments can be highly advantageous. Apartment rentals are currently the best choice for income-generating real estate property. Apartment rentals can be the perfect fit for any investor, whether beginner or experienced. From secure financing, easy management to high rental demand, you can get it all in an apartment building.


  1. Commercial real estate

Among investors, commercial real estate properties are a preferable option. In comparison to residential estates, commercial properties are a bit more complex to handle. Therefore, to invest in commercial properties, you must have the proper knowledge about real estate. Many investors have used the opportunity to make millions investing in this type of property.

There is a lot more risk associated with investing in commercial properties. However, the income gained is worth the risk. Renting to a professional company or business owner eliminates the worry about monthly rentals as the tenants do not want to risk their reputation in the market.


  1. Real estate investment trust

The market for REITs is well established and includes people through stock brokerage accounts and retirement plans. A company typically owns and operates the real estate; therefore, you invest in the company and not just the real estate property. The company then pays the investors in dividends. 

A disadvantage of REIT investments is the absence of the ability to benefit from the deferring taxation on the capital gains made from the sale of shares.


  1. House flipping

If you prefer not to manage a property, you can consider buying homes to renovate and resell. It may seem easy on TV, but it is a time-consuming and costly process; however, the capital gains you will get here are unmatched. 

A successful flipper must always stay prepared to face unexpected problems, time, unexpected mistakes, increases, and long renovation timelines. Another essential thing to do is build a team of experts you can trust, such as interior designers, contractors, accountants, etc.

This type of real estate investment is the best choice for wealthy investors who work full-time in the local market as this form of investment can make a large amount of money in a short period.

Speak with a Shelly Knows Mortgages team member to find the solution for your Commercial & Luxury Home Mortgage needs.

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