The Sumter housing market offers a unique opportunity for investors as over 18,000 of its current homes and rental units are vacant. This is an opportunity to buy unused properties at a low cost, but what you do with them will determine your ROI.
If you are going to capitalize on the unused housing market in Sumter then you need to decide what type of property you want and how you will use it.
Read on to discover several real estate investing options and their benefits.
Purpose of Investment
Before you start real estate investing you need to decide how you will make a profit from your property. The four main ways to achieve a high ROI are the following:
- Rent your property.
- Flip, fix, and resell your property.
- Hold onto your property for the market to rise.
- Use your property for your business.
Once you decide how you will make money on your investment then you can begin your search. And your search will lead you to various property types as seen below.
Types of Real Estate Investing
There are four distinctive types of real estate investment properties: residential, commercial, land or new build, and REITs (real estate investment trusts). Each one has a different level of involvement, ownership length, and ROI average.
Residential
You will find most real estate investing tips for residential properties. These include single-family or duplex houses, apartments, condos, and vacation homes.
A residential property offers the best rental tax benefits if you choose to become a landlord. This is also an easy way to have a monthly cash flow, especially when you hire a property management company to handle the logistics of your rental.
Fixing and flipping residential properties is also common, however, this process takes more work and additional investment for construction and renovation costs.
You could also hold onto the residence and wait for the market to rise, but you do need to pay taxes and your mortgage in the meantime.
Commercial
Commercial buildings can also be used as a rental property. The benefit of renting commercial units is that the leases are usually longer for businesses at an average of 3 to 5 years.
These businesses include hotels, warehouses, shopping malls, and office buildings. However, some apartment buildings are considered commercial if you own the whole building and exceed the state limit for residential classification.
Land and New Builds
The best real estate investment is a blank slate like raw land or buildings just beginning construction. These options give you a chance to choose their purpose and design the structures.
Use your land to build your own business or lease the land for multiple uses. Holding the land is cheaper than a physical building as you will only need to pay property tax. Land is also cheaper than buying a home or commercial unit.
REITs
Your last real estate investment option is to not own land or a structure at all. Instead, you can buy stock in a commercial property owned by another company.
Some REITs are listed on the stock exchange while others are crowd-funded, which poses a higher risk and ask for larger investments.
Getting Help With Your Real Estate Investment
Once you choose your real estate investing option you should get professional help to manage it. We are here to assist you with rental maintenance, tenant screening, and more.
Contact us today to speak with an agent.
