Real estate investors can recoup great returns on money spent. If you’re considering purchasing an investment property, selecting the right one will greatly increase your chance of financial success. Use this guide to understand the basics of each property type to help you make an informed decision. 

Which Type of Investment Property Is Right for Me?

1. Residential Real Estate

Residential properties include single and multi-family homes, duplexes, and apartments. These are the most straightforward investment option available. When you own a residence, you can retain the property and use the rental income it generates to boost your bottom line.

If you’re not interested in owning a property long-term, flipping the home could be a viable investment option. This process involves buying a home, renovating it, and putting it back on the market with an increased value. While flipping a home can be costly, the more valuable your renovations are, the more valuable the property will be when it’s time to sell. 

2. Commercial Real Estate

Commercial properties include things like retail shops, office buildings, industrial plants, and hotels. While commercial properties often come with a higher price tag, these investments also offer the potential to earn more money from factors like multiple-year leases with business. If you plan on retaining ownership of the building, it’s also less likely you’ll need to deal with the yearly vacancies that are common with owning rental property.

3. Raw Land

It's also possible to invest in an untouched, undeveloped plot of land. This opportunity can take you to one of two places. You may choose to retain ownership of the land and lease it to another party so they can build new construction on top of it.

However, you could also be interested in constructing your own property on the land, which can then be sold or leased depending on your long-term goals. When deciding on a plot of land to invest in, look for emerging areas with an anticipated boom in business or residency to capitalize on.

If you’re considering purchasing land or a commercial or residential investment property, trust the real estate experts at Lawrence Realty, Inc. in Red Wing, MN. Their team can guide you in making the right investment decisions. This family-owned and -operated business has served the residents of Minnesota and Western Wisconsin since 1948, and they’re dedicated to helping you smoothly navigate the real estate transaction process. Call (651) 388-4745 for more information. Peruse their real estate listings online.