Most investors think of the property market as being a stable, low-risk place to park their money. And to a large extent, it is. However, that fact hasn’t put a lid on innovation. Today, there are all sorts of new kinds of real estate investments that people can make, many of which offer big, fat, juicy returns on your initial investment.
There are multiple property investment types out there, some of which are better than others. In this post, we take a roll call of the best so you can make a great return on your capital.
Serviced Storage Units
Storage units are becoming increasingly popular. People living in cramped urban accommodation need a place to keep their stuff safe until they need it or can afford to move somewhere larger. As a result, we’ve seen options popping up all over the place, promising people affordability and safety.
The latest trend is serviced storage units – a kind of home away from home. The idea here is that people rent units in a larger building that provides additional facilities so that they can spend time there.
Let’s say, for instance, that a customer of one of these service providers has a classic car they want to keep safe and work on at the weekends. Most self-storage units don’t double up as garages. But some firms are now providing storage facilities with common rooms, kitchens, and even tools and equipment.
What’s more, hardly anyone knows about these services yet. Many are entirely new. Investing in them early, therefore, could be a way to beat the crowd.
Real Estate Investment Crowdfunding
Let’s say that you’ve found a property and you believe that you can make a fabulous return on it. That’s great. But what if you don’t have the capital for the downpayment to buy it outright? In that situation, you have a problem.
Fortunately, you can crowdsource the funds you need. You simply ask other people in the community for the required cash and then provide them with some kind of return – usually a portion of the rent from tenants in proportion to the money they contributed. That way, you avoid taking on all the risk yourself and you can still drum up significant returns.
Real Estate Investment Trusts
Real estate investing trusts aren’t a new vehicle for getting into the property market. But many people still haven’t heard about them, so they are well worth mentioning here.
A real estate trust is a financial instrument that allows you to buy a “share” of a large portfolio of commercial and residential property. A third-party organization manages the trust. All you have to do is plow as much or as little money into it as you want, and then you’ll start getting returns paid into your account.
These trusts usually offer returns in the region of about 5 percent per year, making them ideal for anyone looking for low-risk investments.
The returns to holiday lets are much higher than traditional renting, thanks to the fact that holidaymakers are usually willing to pay a much higher fee on a nightly basis.
For landlords, this fact is great news. It means that they can charge extra by advertising properties as vacation rentals than as places where people live long-term.
There are other advantages too. Apps take care of sourcing customers, so you don’t need to worry about that. And you don’t have to worry about non-payment. These apps show you whether somebody has paid and tells you more about their individual quality, based on reviews by previous hosts.
Property investment is evolving as the technologies around it change. People still need housing – that requirement is never going to go away. But society is finding new ways to create investment vehicles that allow the average person to include real estate in their portfolios.
Getting in early with some of these new trends in the market is the best way to get ahead of the game. Once people start discovering the new types of real estate options out there, they will immediately bid up the price, diminishing future expected returns. The trick, therefore, is to identify trends worth following and invest in them wholeheartedly. That’s how you make big returns that last a lifetime.
In many ways, the same rules of investing apply to real estate as anywhere else. The goal is to find underpriced assets and then use that to ensure higher returns in the future. If you can find them, that is!