Eleven exciting types of passive real estate investment

BY Luis Noronha / ON Feb 28, 2019

Investment for capital gain

  1. Land bank
    Investment often means getting to know a bunch of obscure phrases and having to work out what they mean. That’s not the case here! Investing in vacant land is just like putting money in the bank, except it will earn far, far more interest.
  2. Development
    If you invest your money in vacant land in the right location you can get a great return: but if you’re willing to put in a little more work and investment to get the land developed it will be worth even more. The investment cycle will be long, typically 25-35 months.
  3. Fix & Flip
    House flipping involves buying a low-priced property, then improving it to sell it at a profit. It sounds simple, but it’s not easy or quick work to find properties at the right price; find contractors who can do the requisite work quickly and well; list the property at the right price; find a buyer and negotiate an offer, and close on it. These factors make it the perfect candidate for the turn-key model of investment. This is a short cycle investment of 4-8 months.

Buy & Hold: investment for recurring income

  1. SFH – Single Family homes
    This is the classic landlord-tenant model of real estate investment: the landlord buys a property, rents it out to a single household, then pays the costs of mortgage, maintenance and so on while receiving the rent as monthly income – which goes up enormously once the mortgage is paid off.
  2. Multifamilies
    In many areas, multifamily properties will bring in higher returns than a single-family house. The high-cost initial outlay and time-consuming ongoing maintenance mean this approach.. is far more achievable through the turn-key model.
  3. Commercial buildings
    1. NNN Retail
      “NNN” stands for ‘triple net’, referring to a commercial real estate arrangement whereby the tenant is liable for real estate taxes, insurance, and maintenance. These bring a lower return than some projects might; but they are attractive,. stable deals.
    2. Stripmalls
      Local, multi-tenant retail strips bring all the benefits of any real estate investment with one big extra bonus: with multiple tenants representing multiple retail sectors, a stripmal is a diversification wonderland!
    3. Shopping Malls
      Shopping centers offer a similar opportunity to make a large profit – but there’s a huge investment required. Be sure to invest in a great location with a diversity of tenants.
    4. Medical facilities
      Healthcare real estate is a great bet for investors because of the stability of the sector – no matter the state of the economy, there will still be great (and growing) demand for doctors.
    5. Office buildings
      This is a gradually growing sector, and one of its most attractive features is . its diversity: office buildings come in all shapes and sizes, making them attainable for many different levels of invest.
    6. Warehouses
      You can easily make more money from a vacant warehouse by finding a better use for the spa: take on a tenant, or simply convert the building to a self-storage facility.