5 Real Estate Niches You Need to Know About
When you think of real estate your first thought is probably a family home. The truth is there is so much more to the real estate world. Investing in real estate is a common way to increase your income. You can be as involved or uninvolved as you want depending on the properties you invest in. There are many different real estate niches that you can explore. Finding the one that is right for you is the key to a successful investment!
Here are 5 real estate niches you should know about.
Apartment Real Estate
Often people will invest in a property with the intent to rent it out. There are many benefits to investing in this type of real estate. One of the biggest advantages is the tax benefits apartments and rentals provide. You may be able to depreciate the value of your property for tax purposes and significantly reduce the amount of taxes you pay each year. Another big advantage is that you have the potential to make a consistently large profit from rent. Rent prices have gone up drastically in recent years due to the scarcity of apartments available coupled with an increased demand. Many people also use leverage to recoup equity from the properties without selling.
Vacation rentals such as Airbnb’s and VRBO’s have been popping up everywhere recently. This type of investment can be even more profitable than a residential rental. Vacation rentals are usually charged on a nightly basis rather than the typical monthly rent. Not to mention, you have the potential to make even more money during peak season. Vacation rentals can also be less work for you. Most vacation rental websites do all the bookings and payments for you. You are only reasonable for the upkeep of your property. If you hire a cleaning company to do this that is even less work for you! Some people even develop strategies based upon renting properties and then making them available for VRBO and Airbnb rental.
Assisted Living Facilities
Assisted living facilities are designed for people with disabilities or the elderly who need help with daily activities. These properties can provide great income while also giving back to the community. Much like a vacation rental, you can own the property and have staff run the actual facility for you. You don’t have to invest a lot of money in a large-scale facility either. You could turn a house into a residential assisted living building. This can be a passive investment if you choose it to be. Another great thing about assisted living facilities is that the demand for them will only continue to grow as our population ages.
Commercial Real Estate
Commercial real estate refers to buildings or land intended to generate a profit, either from capital gain or rental income. One of the biggest advantages of investing in commercial real estate is the tenants will likely be more responsible than the average residential resident. Retail tenants know they have public eyes on their property, so they are more inclined to better maintain the property. With commercial properties, you can also create a triple-net lease. A triple net lease is an agreement between the tenant and landlord in which the tenant agrees to pay all property-related expenses on top of the rent. These expenses include things like insurance, taxes, and common area maintenance fees. This leaves you with very little management as the tenants are responsible for the upkeep of the property.
Equestrian facilities are a unique type of real estate that can be quite profitable. These properties are perfect for horse lovers who want to make money from their passion. One of the best things about equestrian facilities is that you can charge for boarding, riding lessons, and even competitions. If you have the land and the love for horses, then this could be a great opportunity!
Real estate investments can be incredibly profitable. It is important to do your research and talk to a trusted financial advisor to figure out which type of investment is right for you. For more information on unique real estate niches (specifically assisted living facilities, Airbnb’s, and equestrian facilities) listen to Episode 32 of our podcast Your Financial Advocate. This episode features special guest Richard Davis who is an experienced realtor and provides plenty of insight to listeners.