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What type of property is the best investment?

Buy-to-let landlords, whether they are just starting out or have years of experience under their belt, will at some point face the challenge of deciding which property to add to their portfolio. The buy-to-let property is an investment first and foremost, despite the fact that landlords have a lot of things to think about before making their final choice. Because of this, the private landlord's potential return on investment over the long term should be one of their key considerations when purchasing property.

In the current real estate market, which kind of properties make the most profitable investments? If you're expecting for a simple response, you're going to be disappointed since there isn't one.

In order to find the answer to that real estate question, you will first need to educate yourself on the various types of investment properties and the benefits and drawbacks associated with each type. This will allow you to choose the type of investment property that is most suitable to your individual requirements and preferences as a real estate investor.

Would you like to speak to a specialist? Book a complimentary discovery session by calling: (03)999 81940 or emailing

People typically attempt to make financial investments in one of these three primary categories of real estate: unoccupied land, commercial or industrial property, or residential property.

There are positives and negatives associated with every sort of real estate investment. Nevertheless, if you are wanting to amass riches, one of the first investments you should make should be in residential property, as this will serve as the foundation of your portfolio.

A residential portfolio not only delivers the best market growth (during the past few decades), but it also gives the highest rental stability. Both of these benefits are unique to the residential market. However, it is essential that you have a solid understanding of the other primary categories of real estate, as this is a subject that you might find interesting at some point in the future.

There is a wide variety of property investments available, and selecting the one that is best suited to your investment strategy can be challenging. This is especially true if you have the financial resources necessary but are inexperienced in the world of investing, despite the fact that you may have the ability to do so.

We have provided a list of some of the property investment kinds that we recommend, along with an explanation of why these types of investments may or may not be suitable for the investment strategy you have chosen.

Off Plan Investing

It is possible to secure a significant price reduction on the first purchase of a home by making your purchase before the construction work begins. However, this is something that is frequently thought of as dangerous, and you would be required to complete your research on the developer before proceeding.

You can frequently get discounts of up to fifty percent lower than the price paid on completion, and you get the opportunity to watch the build grow in the knowledge that your property will be worth so much more when it is finished. These are both huge incentives for purchasing a property before it is finished being constructed.

If you have the funds and you are willing to wait, then this risky technique has the ability to raise your portfolio with returns that have never been seen before. This is true even if you flip the property immediately after it is finished being built and earn a quick buck. If either the time or the investment is done incorrectly, it is possible that the outcome will be less favorable.

Because of the inherent danger, we prefer to think of it as investing in the style of Las Vegas. However, one approach to mitigate that risk would be to invest through developers who we are familiar with and trust, so that you may have confidence that you will get your money's worth.


Showhomes provide your investment portfolio a taste of luxury that you can't get anywhere else. We are all familiar with how they operate; the Showhome is a masterpiece that is outfitted by developers with various fixtures and fittings so that they may show prospective homebuyers around.

The developer offers these showhomes, which are completely furnished, to investors at a reduced price, and then rents them back out at the going market rate while the investors are using them (usually until all homes are sold within their development). When they are finished, you will have a home that is beautifully adorned and ready to live in at a cost that is a fraction of what it would normally be.

Vacation Rentals

One further industry that is expanding as a result of websites like and Airbnb is the market for investments in holiday letting, in which the rent is more erratic but significantly greater than it is through long-term letting.

You can now rent out your home for the same amount of money in one week as you would normally make in one month. This is because city-centre apartments are becoming more desirable, and quiet coastal and rural retreats are becoming more popular than ever before as alternatives to hotels and bed and breakfast accommodation.

The Best Kind of Real Estate to Invest In

When a real estate investor asks what the best type of investment property is, the answer that is given is always going to be relative since it is dependent on the specific circumstances of the real estate investor who is making the enquiry. When you are trying to choose which type of investment property would be the best fit for your long-term goals and short-term financial aspirations, there are a number of considerations that need to be taken into account. Your present financial status, as well as your short-term and long-term investment goals, as well as the amount of expertise you possess regarding the real estate market, are some of the most essential elements that will substantially affect your decision regarding the sort of investment property that is most suitable for your particular circumstances. In addition, your investment goals should be considered in light of your current financial situation.

While some investors choose to base their real estate investment strategy on the potential for long-term profits and appreciation of their properties, others select investment properties with the goal of turning a profit at the earliest possible opportunity in the hopes of maximizing their return on investment. However, the financial status of some real estate investors enables them to make an investment in property using simply cash. The financial situation of other real estate investors, on the other hand, may necessitate them to rely on a mortgage to finance the property they use for investment purposes. This limits their options and necessitates that they arrange their finances and revenues in accordance with these restrictions.

If you take into account the preferences of individual real estate investors in addition to their desired investment strategy, you will be able to determine the ideal type of investment property. This will allow you to maximise your return on investment.

The following is a list of the numerous types of investment properties, along with the benefits and drawbacks of each, as well as the qualities that lend themselves well to specific kinds of real estate investments.

Rental Residences

Although the idea of owning a rental property and becoming a landlord could lead some real estate investors to imagine that a rental property will immediately result in them receiving a passive rental income, in practise, this is rarely the case. Although the concept of owning a rental property and becoming a landlord could lead some real estate investors to imagine that this will be the case, in practise, this is rarely the case Earning rental revenue from a property that is rented out to tenants and does not require any engagement or effort on the part of the landlord is referred to as passive rental income.

However, over the course of time, a rental property has the potential to be the kind of investment property that brings in the highest profit. This is because the majority of the rental income that you get off of your investment property will go towards covering expenses such as your mortgage payments, property taxes, maintenance fees, and possibly even the cost of hiring a professional property manager. This is because of the fact that the majority of the rental income that you get off of your investment property will go towards covering expenses.

If an investor purchases a rental property that has the potential to provide $1,500 monthly in rental income, for example, they may believe that they can immediately stop their day job and exclusively rely on the passive rental income that they are making from the property. Because of this, there is a chance that they will think about renting a house that has such possibilities. Having said that, the fact of the matter is that the vast majority of rental homes come with exceptionally high recurring expenses. This is especially the case if you obtained financing for the acquisition of the property in the form of a mortgage loan, which is the scenario that the great majority of people who invest in real estate find themselves in.

If you take the rental income from your investment property, which is $1,500 per month, and subtract all of the expenses that you would have to pay to keep the rental property running, you might end up with a cash flow, or profit, of somewhere between $150 and $200 per month. This is assuming that you don't incur any unexpected costs. This is after you have paid your mortgage payments, taxes, fees for property management, and maintenance on the property. You will still need to save some money for any unforeseen house repairs in order to maintain your investment property in good shape and your renters satisfied.

You could be asking yourself, "Given that information, why would anyone choose to put their money into rental property?"

The explanation is simple: due to the plethora of benefits that lie ahead in the future.

In the long run, once you have paid off your mortgage — the single largest expense for rental properties — you will be able to enjoy the kind of profit from your investment property that you've always anticipated enjoying. This is because your mortgage was the single biggest expense.

The best part is that even though it could take you anywhere from 15 to 30 years, depending on the type of mortgage you have, by the time you reach that point, it won't be you who's paid off the mortgage; rather, your renters will have paid it off through their rental income. This is the case even though it could take you anywhere from 15 to 30 years. In addition, given the current state of affairs, it is highly probable that the value of your property will have increased and that it will have appreciated over the course of this period of time. Because of this, you will be able to sell the property for a significant amount without having to pay any additional fees, which can result in a very significant increase in your earnings.

blurred house in foreground with coins in background

Vacant Land

Many people who invest in real estate are under the impression that undeveloped land offers the greatest potential for financial return among the many types of investment property. This is due to the fact that the usual purchase price of an empty property is so cheap, and the ongoing maintenance expenses connected with owning vacant land are essentially nonexistent. As a result, the purchase price of a vacant property can be rather affordable.

The payment of property tax is typically the only expense connected with land ownership in the vast majority of instances. On the other hand, this tax is very reasonable and may be tolerated without any difficulty. However, over the course of time, this tax could amount to thousands of dollars, which means that you will need to ensure that the profit you generate from selling the land is greater than the price at which you purchased it as well as the expenses of taxes that you have paid. This can be accomplished by ensuring that the profit you generate from selling the land is greater than the price at which you purchased the land. In many cases, it is also possible to create a modest profit from the land by growing it oneself or even renting it out to hunters. This can be done in a number of different ways. This can be accomplished in a number of different ways.

Finding a lender that is willing to give finance for your investment in undeveloped property can be difficult. This is one of the most significant disadvantages that is connected with investing in vacant land. Other disadvantages include: This suggests that the market for empty land is largely a cash-only market, which indicates that you will need to gather a significant amount of money before you are able to make your purchase.

In conclusion, if you want to maximise the return on your investment in unoccupied property, you will need to have a comprehensive grasp not just of the market but also of the neighbourhood in which the land is located. In addition, you will need to have the ability to make accurate projections regarding the expansion of the surrounding area. You will also need to make certain that, in the long run, the value of this undeveloped land will increase and that there will be buyers interested in constructing real estate development projects on the land.


The third and last type of investment property consists of residences that are now in a deplorable state and call for extensive remodelling. A sizeable proportion of people who invest in real estate are of the opinion that this particular kind of property has the potential to generate the highest return on investment. The real estate market offers investors a variety of short-term investment opportunities, some of the most lucrative of which are investments in properties that may be upgraded and then resold for a profit. They begin with the purchase of a piece of real estate that is in a deplorable state, then continue with the renovation or repair of the property, and finally, they conclude with the selling of the property at a price that is significantly higher.

To produce very high profits in a very short amount of time, fix-and-flip investments are among the very best kinds of investment properties that may be purchased. Despite this, investments in "fix-and-flip" properties often involve very significant expenditures and ask for a substantial amount of planning to be successful.

However, after you have purchased the property, you will be responsible for a variety of fees that were not included in the initial purchase price. This is because fix-and-flip homes often have price points that are very low due to the less-than-ideal state of the property. This accounts for the costs incurred in modernising and restoring the real estate property so that it can be brought back into a condition that is habitable and appealing to potential buyers. This also includes a number of other expenditures, such as the examination of the property, all of which are crucial to the success of your investment in real estate, which you have chosen to pursue.

Fix-and-flip properties run the greatest risk of incurring unforeseen costs and expenses, both throughout the course of the rehabilitation process and during the closing procedures. These costs and expenses could arise at any point during the two processes. These expenditures and costs could be incurred either during the process of closing or while the property was being renovated. Therefore, in order to minimise unexpected costs, a real estate investor will need to have the property evaluated at various stages of the investment process. When attempting to plan your investment and the costs that are linked with it, these are the kinds of things that should all be taken into consideration and accounted for.

What to search for in a lucrative real estate investment

You should look for a rental property that fits comfortably within both your financial and time constraints. Since the economic downturn, a greater number of purchasers with modest budgets have shown interest in purchasing investment homes. There has been a widespread and dramatic drop in the asking prices of many houses since before the recession.

When choosing an investment property, one of the most important factors to consider is the sort of real estate that will generate the highest return throughout the course of its ownership. Although it may appeal to your sensibilities to buy the biggest house on the block or the house with the state-of-the-art movie theatre in the basement, neither of these choices makes much sense as an investment purchase. Rather, you should focus on finding a property that meets your needs and budget.

If you want to be successful as an investor, you have to look beyond your own preferences and think about what would appeal to customers. Because the largest home on the block is probably already overpriced for the neighbourhood, there is not much room for profit if a future buyer or renter decides they do not want to bear the expense of installing that theatre.

In addition to this, make it a point to bear in mind the general state of the property. Even while it's normal practice to hunt for foreclosed or otherwise troubled real estate to buy in, you should still make sure the property won't require major renovations. It would be ideal if it simply required a few minor repairs to be done. You don't want to find yourself in the position of having to spend fifty thousand dollars on a piece of real estate that won't allow you to repay your initial investment.

People are frequently attracted to low prices; nevertheless, the expenditures on items like replacing a furnace or roof can quickly pile up. Some real estate brokers recommend bringing a contractor with you to the viewing so that you can get a better idea of exactly what needs to be done to bring the price of the home up to market value.

Why the location of an investment property is very important

The location in which you choose to purchase a property for investment purposes is of critical importance. It is beneficial for the home's resale value if it is located in a desirable neighbourhood or in a community that is on the cusp of becoming an emerging community.

It is also essential to ensure that the location of the property would appeal to the customers or tenants that you are looking for. When choosing where to put your money, the first thing you need to consider is whether you are more interested in capital growth or a stable stream of monthly income. This will play a role in determining whether you intend to continue using the property as a rental or sell it in the near future.

Also, pay attention to the shopping habits of the residents in the neighbourhood. Is it largely a community of homeowners or a community of renters? Is there a scarcity of either of them that might sway you to choose one option over another?

Look for indications of expansion in the neighbourhood as a possible indicator of the property's potential for value. Even if the businesses have not yet been constructed, it is a positive sign if there is a diverse selection of retail enterprises planned for the area, such as places to shop and eat.

It's not unheard of for people to invest in real estate in another state, despite the fact that most people buy investment properties in their own local markets. If you do decide to move there, it is imperative that you educate yourself on the local real estate market. If you don't restrict your search to a certain geographic area, one of the benefits of investing elsewhere is the increased likelihood of finding real estate at a more reasonable price.

Your major focus should be on accumulating money through the purchase of the residential property. Not only has it historically provided the highest rates of market growth, but it also gives the most reliable levels of rental income.

You can decide at a later time to construct a commercial portfolio on its own. Perform this action when both your equity and cash flow are in a healthy position.

Would you like to speak to a specialist? Book a complimentary discovery session by calling: (03)999 81940 or emailing

Just keep in mind that if you follow your strategy to the letter, you will be successful in obtaining what you require to appreciate life. Before you have a solid foundation set up in residential real estate, you shouldn't get distracted by other types of investment until you've done that. If you aren't sure which kind of investment property you want to get involved with yet, here are some things to consider.

There is no one approach that can be taken to identify the most profitable category of investment property. There are a lot of different aspects that go into determining whether or not a piece of property is suitable for use as an investment, and the only person who can evaluate and decide how important each of these aspects is the individual real estate investor who is in the market for an investment property.

Before getting involved in a real estate transaction that is handled privately, extra precautions need to be taken to make sure that all of the potential downsides have been thoroughly evaluated, and that a real estate attorney has reviewed every facet of the transaction. If you do choose to invest in rental real estate, keep in mind that this type of purchase is a long-term investment that, in most cases, won't start producing a profit until after the mortgage on the property has been paid off.

Some things to keep in mind if you want to own a rental property:

  • Keep additional cash aside for emergencies, restorations, special assessments or vacancies;
  • Consider it a part of your small personal business and be sure to keep track of all pertinent receipts;
  • To assist you in staying abreast of the ever-shifting regulations, you should seek the services of an accountant, a lawyer, and a real estate agent.

Your current circumstances and your comfort level with taking on risk can help determine the approach to real estate investment that will work best for you.

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