Below are ten categories of real estate, and different ways to invest in them. The best one for you is something only you can decide, according to your particular needs. To help you do that, I list a couple good points and bad points for each type.
1. Renting single family homes. Good points: An easier way to get started, and good long term return on investment. Bad points: Being a landlord isn’t much fun, and you typically wait a long time for the big pay-off. You also lose all your income when a house is vacant.
2. Fixer-uppers. Good points: Fast return on your investment, and it can be more creative work. Bad points: More risk (many unpredictables), and you get taxed heavily on the gain.
3. Low income housing. Good points: Similar to any other rentals, but with higher cash flow. Bad points: Similar to any other rentals, but with more repairs and tenant problems.
4. Selling rent-to-own houses. Good points: If you buy, then sell on a rent-to-own arrangement, you get higher rent, and the buyer is usually responsible for maintenance. Bad points: Bookkeeping can be tricky, and most tenants don’t complete the purchase (this can be an...