Real estate investing can be one of the most lucrative and stable ways to grow your wealth. On average, according to the S&P 500, residential properties generate an average annual return of 10.6%, while commercial properties average 9.5% and REITs 11.8%. But making the wrong decisions can leave you in financial ruin. Here are eight ways couples with no children can make millions on real estate investments.
1. Invest in Commercial Properties
Commercial real estate investing can be very lucrative if you know what types of properties to invest in. Many traditional office buildings struggle to retain tenants as many workers didn’t return to the office after COVID. However, other commercial spaces like warehouses, retail spaces, mixed-use buildings, hotels, and special-purpose buildings could all be good investments. Choosing the right location is also essential if you want to get a good return on your investment.
2. Buy Residential Properties
If you’re interested in managing residential properties, you could invest in multifamily homes, apartments, condos, or townhouses. You’ll want to start small and choose a good location. Make sure that the numbers make sense and rental prices in that area can cover your mortgage, taxes, insurance, and maintenance while turning a profit. If you don’t have experience managing tenants, you may also want to hire a professional management company.
3. Rent Your Primary Residence
Many couples rent out their primary residence to cover their mortgage. This frees up additional money for couples to invest and grow their wealth. You may want to consider buying a multifamily home for this reason.
4. Purchase Vacation Rentals
Vacation rentals during peak season can rent for a premium price. Vacation rental real estate investment is a good way to build your portfolio. If the area you buy in is an up-and-coming tourist destination, your property will likely appreciate well. You’ll want to consider rental laws in that area before making your purchase. Since vacation rentals are labor intensive, you may also want to price out the cost of a management service, cleaning service, and other maintenance like lawn care.
5. Own Shares of Investment Properties
If you don’t have enough capital to purchase an investment property outright, you may want to look into REITs or crowdfunding. These may have high potential for returns but usually have more risk. You also won’t have to manage the property yourself.
6. Buy in Affordable Markets
If you purchase a home in an affordable market that continues to grow, you can make millions. Look for signs of a growing economy like new businesses, major infrastructure projects, and new arts and culture initiatives. You may also want to choose a spilling-over area from a major city. Your best resources are talking to locals and real estate agents about the area.
7. Flip Homes
If you are handy, flipping homes may be a good real estate investment for you and your partner. You can always hire a project manager to help you flip houses, but this can be more costly. As you hire professionals, make sure that they are trustworthy to best protect your investment. If you overspend on a flip, you can quickly lose money.
8. Target Luxury Properties
If you have experience with the real estate market, you may want to target luxury properties. The appreciation potential on these homes is high and they tend to hold their value better even in downturns. However, luxury properties take longer to sell and often have more particular buyers. Make sure that you understand the market to make the best investments.
Have you invested in real estate? What has been your experience with real estate investing?
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Teri Monroe
Teri Monroe started her career in communications working for local government and nonprofits. Today, she is a freelance finance and lifestyle writer and small business owner. In her spare time, she loves golfing with her husband, taking her dog Milo on long walks, and playing pickleball with friends.
