Right now is a great time to add or begin your investment portfolio. In this post, we will help you learn more about some of the great real estate investments you can make to diversify your portfolio in Lexington!
In today’s market, diversification is more important than ever. To have a truly stellar portfolio, you’ll want to include stocks, real estate, and other assets to help build your wealth. That said, you’ll want to diversify within these categories, investing in different industries as well as different types of real estate. Below, we have highlighted 5 different types of real estate you can use within your portfolio. As always, reach out to Bluegrass Investment Properties LLC for assistance in finding the Lexington investment properties that are right for you.
Land can be an excellent investment yet it is often overlooked. It is versatile, low-maintenance, and low-cost. There are many ways you can utilize land when building your portfolio. You can buy land in Lexington and build on it. You can hold onto it, cashing in when it has appreciated to a level you like. Or you can buy and quickly flip it if you know that is in an area with high demand. and is typically priced much lower than a house or other type of real estate investment. Whether you are a seasoned investor, adding land to your portfolio is a great way to diversify!
Mobile homes are another inexpensive way to add real assets to your investment portfolio. With the markets signaling recession and small housing options more popular than ever, mobile homes are in high demand. In many cases, you can find a mobile home for only a few thousand dollars. Before you by, find out if the mobile home comes with the land underneath it or if you will need to pay a lot rent. You should also familiarize yourself with the repairs and maintenance needed for a mobile home as if is much different than a standard single-family home. Whether you are rehabbing and flipping or holding on to the mobile home long term, the right property can quickly add additional income, paying for itself in no time.
Investors can find many benefits with multi-family properties when used to diversify their portfolio. With multiple tenants, comes multiple income streams. Even if someone moves out and you have a vacant unit, you will still be receiving income from the units that are occupied. The downside is that you will have to find and screen more tenants, deal with more phone calls, and possibly have to mediate disagreements between the people living in your building. That said, your repairs costs can be lower (you’ll only have to replace the roof once) and you are more likely to generate a guaranteed income each month. Flipping a multi-family property is a bit more difficult than flipping a single-family home. There is a smaller market for these properties, but it can be done. Most investors will do a moderate rehab, then rent the property out long-term. With the right tenants, a multi-family will provide you with a substantial income for years to come!
Commercial real estate can be extremely lucrative, but there are a few things you should be looking for. First, you’ll want to determine which type of commercial property you are looking for. You could choose retail, medical, office buildings, or other property types that will be viable in your area. Analyze a few deals and get a good idea of how to properly run the numbers. You’ll want to run some comps, determine the net operating income, gross income, and cap rate amongst many other factors. Most importantly, make sure the property is currently occupied with high-quality tenants, or that you purchase a property that will attract them.
REITs are a popular investment vehicle for those interested in investing in larger real estate assets but lack the capital to do it all on their own. Investing in a well-researched REIT can be a way to generate profits while lowering your risk. Shares in a publically traded REIT can be purchased through a broker. You can also invest in non-traded REITs and REITs through a mutual fund or exchange-traded fund. While you will still need to do some homework, investing in this manner will give you the added benefit of experience on your side. These funds don’t make money unless you do.
At the end of the day, it is important that you focus on making investments you are comfortable with. That’s not to say you won’t find yourself a little bit out of your comfort zone, but you should still be making purchases that make sense.