In a relatively volatile economic climate, it can be tempting to forego any kind of investing whatsoever, and hide your money under the mattress, or at the very least the savings account equivalent. However safe your money might be under those circumstances, it certainly isn’t going to grow much.
Even though the housing market has its own dangers, a solid investment you can either sell on or rent out for income is still one of the safest ways to invest money. However, all property investments are not created equal, so here are some of the safest paths for the cautious investor:
Safest Ways to Invest Money in Real Estate
The Family Home
Not a family home for you and yours, but a single family home either to fix up and sell or rent out. The pros of doing this are that if you’re purchasing close to home, you know the area and the market value both for sale and rental. One big con is that if you’re buying to flip or rent, the property might require significant renovations before it’s livable, and that could seriously cut into your profit margin.
Apartments without Tenants
There are occasions when purchasing one or more apartments within a building can be a prudent investment; for example, if you’re purchasing to rent in an area where the tenants are single young professionals, or a small group looking for a quiet and well-maintained apartment, they are likely to not only take care of your property, but stay for a significant length of time. The downside is that if the area is relatively affluent with high property values, your return might not be as much as you were expecting, especially if you’re constantly having to upgrade the property to match the market.
Commercial rentals can be a good investment for the careful buyer, especially if you’re lucky enough to pick up a retail unit with living accommodation attached, such as an apartment upstairs. The downsides of this kind of investment tend to become apparent when economies take a turn for the worse. Small businesses will find it harder to survive, and you may find the commercial area of your investment unoccupied for long spans in a worst case scenario.
Turnkey Property Investing
Turnkey property investing is almost certainly the safest form of property investing for those that would rather let the professionals handle the details while they, the investors, sit back to reap the rewards. With the ability to invest in properties that may even be in the next state it’s easier to make your funds go further. It's a safe investment because you'll be working with a management company with local experts who understand the market, have experience managing all the details of the business, have relationships with all kinds of local vendors for maintenance—and can even help you choose a property that will be likely to give you a high return. That's why it’s so important to go through an experienced turnkey property management company if you want to get the most benefit from the investment.