Types of Residential Properties That Make Good Real Estate Investments

Copyright (c) 2011 Jack Bosch

There are many ways to make money with real estate investments. Renting is one of the most common money makers and covers many different types of property from residential to commercial. Residential rentals also present many opportunities as there are homes, duplexes and apartments that can be purchased for the purpose of making money to name only a few. Below are five examples of rentals properties that are guaranteed to give you a return on your investment.

The first is a single family home. This is just exactly as it sounds, a home that could occupy one or more people. Family homes usually have two or more bedrooms along with several other rooms. They make great rental properties because many people often prefer living in a house but simply cannot afford to buy one. Single family homes also provide an easy way of getting into real estate investing and there is a multitude of financing options available. The possibility of a low down payment is also an inviting factor. They also build equity during times when prices are rising even if rent prices aren't increasing because they can be sold to residential buyers.

An apartment building is the second type of rental property that can make you money through real estate investing. Here, the price is based on income. Unlike with single family homes, only investors buy these properties for the sole reason of renting them out and subsequently making money.

Multiple unit residential rental properties also present great money making opportunities. These include: duplexes, triplexes and four-plexes. They are different from single family homes and apartment buildings. If you keep it under five units, however, you will be able to finance them like a single family home. That can serve as an advantage for your new investment.

Low income housing also presents many opportunities for rentals. By purchasing small houses in need of repairs, you will have the opportunity to fix them up. Here there are unique advantages. This will mean more repairs and investing of your time, but it will also mean buying homes at lower prices and renting them out. Here you will be able to purchase a greater number of single family homes and will have the opportunity to make more from the rent.

There are also other types of residential properties that are less common and don't have the advantages as those listed above. The reason to invest in these properties is cash flow. One great example of this is a large house that would lose money every month as a single family or apartment rental but might do well if converted into a boarding house. Here you would not necessarily need to make any repairs, and could rent out individual rooms per week or month. Again properties that fall into this category could still have the potential of being great real estate investments.

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