Compare investing in different property types
As a lot of people keep looking for fast home buyers or plan to sell house with tenants, the real estate field has emerged as one of the most sought investment options. But it’s unfortunate that many new investors don’t understand the different types of properties they should invest. Most often, this leads to returns that are less than expected. In this post, we’ve compared two different types of real estate investing namely turnkey property investing and rehab-to-rental investing.
- Turnkey property investing: A turnkey investment is something that is already refurbished and sometimes may have tenants in place. This is ideal for investors who don’t have resources to renovate a broken house or the time to find prospective tenants to make profit out of it. Let’s have a look at the pros of turnkey property investment.
- Every property needs maintenance to be done and this becomes an additional expense. With the help of property management companies, investors can perform these jobs seamlessly. Moreover, these management companies often have contractors who will charge you below the normal market rate.
- If your property is located in another state, then regular management of it would surely become a headache for you. Turnkey homes often come with property management services. They would be performing jobs like payment of applicable property taxes, managing rent collection, coordinating repairs etc for a nominal charge.
- Rehab-to-rental investing: This type of investing is one of the sweetest dreams of many new real estate investors. Purchasing a cracked down house, investing money and time into it to transform it into an improved and eye-catching one and finally, sell house quickly to make a hefty amount of profit – all sounds nice. But, in reality, rehabbing investment is not so easy. There are some key factors that you must keep in mind.
- You can’t rehab a property on your own. Even experienced contractors often take help of sub-contractors to perform rehabbing. Successful rehabbing projects depend on adept contractors to get the job done efficiently and quickly. Additionally, you would be requiring a lawyer for taking care of the legal aspects.
- Like any business, you must have adequate insurance policies in place, especially when you’ve people handling harmful equipment. You need to ensure that you’re fully insured and for that you need to consult with an attorney who charges a reasonable fee.
- This is perhaps one of the biggest mistakes done by new investors. They start the rehabbing working without consulting with their contractor and therefore, the budget for the rehabbing work remains unclear. When calculating budget, you must consider the unpredictable occurrences.
Whatever investment type you choose, look for properties located at centralized markets because they always stand a better chance when you need to sell house fast and make profit.