In previous articles, we've looked at investments – namely fixed-income assets like bonds – that, while profitable at times, can ultimately prove to be a poor decision. Cash flow real estate, which involves purchasing properties and renting them out to qualified residents, was offered as a beneficial alternative for those who want to take a stronger, more independent role in the control of their financial future.
Today, we'll examine the different kinds of residences on the market and what opportunities or challenges come with them.
The types of houses available in the industry today include:
Apartments and condominiums – Compartmental housing buildings are a great opportunity, with multiple income sources living in the complex at once. However, this type of residence can be complex to run as the owner may have to employ a superintendent to oversee maintenance and tenant concerns.
Duplexes – Also known as a townhouse or split-family, this property is beneficial because the owner can have several tenants to draw from at a given time. Many of these homes are in housing communities that are well-kept and close to commercial areas, which helps to boost property values. One drawback about this kind of residence is that with more tenants comes more responsibility and potentially increased need for repairs.
Single-family units – This is the industry standard, usually having three to four bedrooms and one to two bathrooms. Investors in this kind of property have some flexibility about how they structure these homes. They can put an option to buy on the lease, which takes all maintenance responsibilities off of you, the owner, or rent and then sell the property after an average of two years holding the property using the equity to purchase additional properties.
Properties like this in areas near universities are also highly-sought, enabling owners to charge a higher premium depending on demand. Once several homes are owned free and clear, by duplicating this strategy, the investor can essentially retire on the cash flow generated from the rental income of several homes, ranging from anywhere between 10 and 100, depending on how much cash flow you require for retirement.
To learn more about cash flow real estate contact GreatWealthStrategies.com to receive a free "Game Plan Report."