There are tons of alternatives.
You have real estate, stocks, and then you have alternative investments, like crypto. Stocks are extremely unpredictable, so we’re going to take that one off of the table. Crypto is a little bit more of an emotional play, so that’s not the most secure investment you can make either. Therefore, real estate is definitely one of the best investments, but there’s not just one kind of real estate. You have commercial, multifamily and also single-family real estate. There’s different asset classes with each of them that you can invest in, and they’re not all created equally.
Single-Family Real Estate Investments
Single family is a good asset class for someone who wants to have their own home. However, I wouldn’t consider it much of an investment like commercial or multifamily are. If you’re investing into a single family home, it’s not going to be the greatest investment that you can acquire. You have a lot of people doing house flips, and those are great ways you can generate quick income, but that’s earned income. It’s not going to be something you write off depreciation on because you’re buying, flipping, rehabbing and then selling again. It’s kind of a grind and not the best long term investment that you can make. You always have to rely on a team of people so you can continue producing at high levels to make things work long term. So overall, it’s not the greatest asset you can invest in.
Commercial Real Estate Investments
Then there’s also commercial real estate. This is another investment that can be tricky. During the pandemic, commercial real estate property really took a huge hit with people not paying rent. This is an asset class that’s really profitable when it’s good, but when it’s bad and people aren’t paying, there can be delinquencies. This can really hurt you, so there is a lot of risk to investing into commercial real estate.
Multifamily Real Estate Investments
The next one is multifamily real estate. This is one of my favorite assets to invest in because it’s reliable, stable and consistent. If you pick good locations for your multifamily properties, they will appreciate in the long run without putting a lot of work into them. You do have to keep things maintained and keep up on capital expenditures like roofs, siding, exteriors and furnaces. If you keep things intact, your property is almost always going to increase in value, especially if it’s located in the right location close to grocery stores, restaurants, malls, lifestyle amenities, and close to major freeways.
Multifamily is going to be a no-brainer investment that you should be investing in. You can force appreciation on multifamily real estate by figuring out how much money you can raise the rents by if you renovate the apartment units. You can double the property’s value quickly if there’s an opportunity there with rental upside. Multifamily is clearly one of the best, most reliable assets you can purchase. It’s an asset that doesn’t require you to show up to work on it everyday. It’s something that is more on a passive basis and it generates a lot of cash flow.
The Hardest Part About Multifamily Real Estate
The hardest thing about investing into multifamily real estate is finding the right deals. When you’re looking for multifamily deals, you have to keep in mind the location and the quality of the asset. You want to find good locations first and foremost, but you want to have projects that are workable. Good floor plans are needed and it has to be well constructed. You can’t buy a building that’s falling apart and think it will be a great investment.
Structure is really important when you’re investing into multifamily real estate and there’s a ton of upside to it. You just have to put the deals together to find the right improvements. If you want to start investing into multifamily real estate, finding these deals is the critical part to becoming successful. So go out there and find some multifamily real estate deals. That’s going to help you build wealth and a long term investment for yourself and your future.