The Differences Between Single-Family and Multi-Family Property Investing
Learn the difference between single-family and multi-family residential investing and how your investment strategy can
Real estate investing can be inaccessible for a lot of people. Unlike stocks and bonds (which are often called “traditional assets”), real estate is considered an “alternative asset” that’s historically expensive and can be difficult to purchase. But just because investing in real estate seems unfamiliar, it doesn’t mean it should be avoided. It can be a lucrative and reliable way to make a substantial profit both in the short and long terms. It can also supplement your current portfolio with a unique set of benefits (which can include portfolio diversification and a number of tax advantages).
Real estate investing involves the purchase, ownership, leasing, and sale of land as a way of making money. Real estate can be broken down into the following categories:
Be sure to do more research on the different types of real estate in which you can invest.
There are several ways that real estate investments can generate positive returns. Some of them include but may not be limited to:
Every real estate category and investment type has its own set of risks and rewards. But no matter how you decide to invest in real estate, you need to choose wisely by looking at their strengths and weaknesses through a strict underwriting process. This type of due diligence plays an important role in determining if an investment opportunity is financially sound and falls in line with your financial goals. Many investors like to use “projected rate of return” as an important metric while evaluating a piece of real estate, but more seasoned investors will often look at the “capitalization rate” as a preferred way to look at an opportunity.
Active real estate investing will require a great deal of personal knowledge of real estate as well as some hands-on management or delegation of certain responsibilities. Active real estate investors can work on a part-time or full-time basis, depending on the number of properties they own and the nature of these investments. They will typically invest in properties with one or a few owners, so they take a lot of the responsibility for making sure the investment property is successful. For this reason, active real estate investors need to have a deeper understanding of how these investments work — especially with regard to the financial acumen and negotiation skills to improve their capitalization rate and the return on their investment.
Some of the ways you can make money with active real estate investing include but may not be limited to:
Be sure to do more research on how you can make money with active real estate investing.
Passive real estate investing can give everyone the opportunity to use these assets to their advantage. Whether you have a lot of real estate and financial experience or none at all, passive real estate investing allows you to collect the capital while allowing professionals to invest in properties on your behalf. Like stocks and bonds, you’re responsible for your own investments and not for the entire fund. Passive real estate investing can give you a passive income than most active real estate investments, because it doesn’t need as much hands-on management.
Here are some of the ways that you can make money with passive real estate investing:
For more information about how you can get started in real estate investing, be sure to speak to Trevor Shakiba at Shakiba Capital.
Learn the difference between single-family and multi-family residential investing and how your investment strategy can
Real estate investing is one of the best ways to lower your tax bill. For tax purposes, the depreciation deduction allows investors to reduce the taxable income coming from properties they own, and they can do it without incurring a cash outlay.