Every college graduate has different goals after graduating, especially when it comes to investing.
Some people want to earn extra income, while others have goals of wanting to replace their full-time jobs, but most people look towards real estate as the fastest way to make money.
While some investments can bring in a lot of money quickly, others take longer and might not be as lucrative as you hoped.
For this reason, it’s important to truly understand the different types of real estate investments out there and which ones are most likely to yield a high ROI.
You should also consider your goals for your profits.
If you hope to pay off your college tuition, that yields a different strategy than simply saving quick cash for an expense like a wedding or dream vacation.
So, if you’re ready to build up your financial portfolio, here’s what you need to know about investing in real estate.
Fixer-Uppers
When it comes to investing, buying homes that need work can go one of two ways.
If the work needed is minimal, such as a fresh coat of paint or new kitchen cabinets, it’s relatively easy to make a profit.
On the other hand, you may want to reconsider homes that need major repairs, such as new electrical wiring or plumbing.
Homes that need massive repairs can cost more than you can afford, even if they’re located in an ideal location.
What’s more, is that you’ll be responsible for paying the mortgage the entire time the repairs are being done.
Depending on the extent of work needed, you could be facing months of payments before you can rent it out.
Unless you know you can make all the necessary repairs in a timely manner, you might want to look for a different type of investment, as rental properties provide cash flow.
College towns are also in high demand, especially in late summer through early summer. You could look for spaces that need to no work and rent them out to college students.
Since many students are financially backed by their parents or receive student loan money, it won’t be hard to find renters that can pay the rent.
Commercial Properties
If you’re more interested in renting out spaces to other businesses, you could invest in commercial spaces.
While the process is like investing in residential real estate, there are a few differences.
Commercial property usually involves having a business owner rent the space from you.
That means they need to be financially stable and be able to cover the costs of renting out the space.
They should be able to demonstrate a solid business plan, and past, present, and future financials, and be able to clearly explain what they will do if their business isn’t thriving.
Single-family Homes
Single-family homes can also be lucrative if they’re located in the right place.
Urban areas, such as New York or Los Angeles, typically house more apartment dwellers than people looking for single-family homes.
However, some areas are more accustomed to stand-alone homes, like in the Midwest or in the Florida Keys.
If you choose to go this route, make sure to research whether there is a demand before investing.
You can even talk to local real estate agents to find out the latest stats for the area.
You may find that the demand for these types of homes is not as high as you thought, which can save you a lot of money down the line.
