If you’re looking for a solid long-term investment, property is likely to stand out to you as a possible option. It’s one of the most popular ways to invest, providing both an income and the possibility of making a larger sum when selling the property later. You might have already started a property portfolio, or perhaps you’re thinking of getting involved in property investment. Whichever stage you’re at, you can consider several different types of property to invest in. Each one has its benefits and drawbacks, but choosing more than one property type can help you build a diverse portfolio.
Renting property out to tenants is a tried and tested way of profiting from property investment. The more properties you own, the more money you can make. You might choose to target a certain market, such as students or families, and you can consider different property types, such as apartments and houses. If you want to invest in residential property, you need to check what your responsibilities are as a landlord. It’s your job to make sure your tenants’ needs are met. Most of the time, you’ll be agreeing to leases of a year or more, although they can sometimes be shorter.
While they can technically fall under residential property, investing in vacation rentals can be a completely different beast. You could be renting out your property from anywhere between one night and a few weeks or even months. Every time your guests leave, you’ll need to make sure the property is cleaned and presentable. Some people choose to use easy Airbnb management services to make this easier. You can have someone else manage everything from your bookings to maintenance so that you can save time. Of course, that would be an expense you need to consider when you’re calculating your ROI.
Commercial property provides another option to add to your investment portfolio. This is different again as you might have responsibilities as a landlord, but they aren’t the same as if you are renting someone their home. Commercial property can include stores, offices, and other spaces used by businesses. It can be more hands-off than renting out residential property, but you will still need to protect your investment. It’s important to make sure you’re not too hands-off if you want to ensure the property stays in good condition.
Another interesting property type to consider is the mixed-use property. These are developments or properties that combine two functions. For example, it could be a store with an apartment about it or a development that has both homes and business spaces. These are usually most popular with people who have plenty of money to spend, particularly for larger developments that cost a lot to invest in. You still might consider looking at single properties that combine businesses and residential homes.
Diversifying your property investment portfolio helps to reduce risk in the same way that diversifying a stock portfolio does. Instead of sticking to only one property type, explore the possibilities of investing in several.