If you look at the way the real estate market has evolved throughout the last decade, it comes as no surprise that it is, to this day, one of the most profitable forms of investment. But when it comes to real estate investment, many people think about REITs, rental properties or house flipping. While these are all successful, and the go-to choices when it comes to real estate investment, they are not the only options available.
As a new decade begins, new investment options emerge, ready to give investors new and promising ways to diversify their portfolios and dive into a less competitive field. Below are 5 of the more lesser-known options, often called “blue oceans”, precisely because the waters are much cleaner than in other segments of the market. If one of them sparks your interest, don’t hesitate to give it a go.
Coworking spaces started to become a thing about 15 years ago, with the first-ever debuting in San Francisco sometime in 2005. Since then, more and more such shared offices started to emerge, and they became incredibly popular.
Coworking spaces are, in fact, office spaces that can be rented by freelancers or small businesses that don’t need an entire floor to conduct their business. This way, they can rent one or two cubicles or rooms, install their laptops and start working. This way, all those who rent the space can share costs and have a place to work, other than their living room or garage. If you design the place to make it as modular and flexible as possible, you are in for a great business idea. In fact, if you take a look at the industry now, you will find out that around 70% of people work remote at least once a week, and they would like a place from where they can do so, but without any disturbance from family, or roommates.
Investing in raw land is almost unconquered territory, but there is so much you can do with it. More and more construction sites are opening all around us, and if you manage to get your hands on a piece of raw land now, you can sell it and get enormous profits when the time is right.
One of the great advantages of purchasing raw land is that it costs close to nothing to maintain it. The oy thing you need to pay is property taxes, which are often very cheap. In time, you can either choose to develop the land on your own, sell it for a bigger price to construction companies, or rent it for agricultural work.
Most real estate investors avoid investing in raw land, mostly because they do not understand how they can fructify it and turn it into a prosperous investment, but if you learn how to do so, you are in for a treat.
Mobile home parks
This could go hand in hand with raw land investment. In places such as Florida, Texas, and Louisiana, mobile homes are extremely popular, as they are much less expensive and easy to maintain than traditional homes.
Many real estate investors find mobile home parks, just as raw lands, too complicated to deal with, but that is not exactly true. One great advantage of mobile homes, when compared to traditional rentals, is the low maintenance cost. You can either invest in mobile homes and rent them as well, or just transform the land, ensure that water and sewers are working properly, and rent the space for people to park their mobile homes there. If you do buy mobile homes in places such as Florida, for example, make sure to also invest in a Florida manufactured home insurance, as natural disasters can really take a toll on your investment.
While this is not exactly a real estate investment, many people make money from private notes. To put it simply, a private note is a legal document by which you loan money to another individual, and they are bound to pay you back, by respecting the terms and conditions that you decide together.
When it comes to private notes, you will, however, have to be really careful who you give money to. Even though they are legally required to pay you back, if they don’t have any assets, it will be quite difficult to get your investment back. The only way to do so would be to take them to court and win.
The people that look for this type of investment the most are usually those who have a house flipping business and are looking for capital to buy and renovate houses. This way, once they sell the hose, they will be able to pay you back the money, plus interest.
If you have an apartment, or more, that you are looking to put up for rent, corporate housing may be the best form of real estate investment for you. This type of apartment is rented by companies, either for business trips, or for people who need to work for a limited period of time in a different city, either because they are opening a new business there, or they are managing one.
Corporate clients are willing to pay much more than usual tenants, but they do usually require to live in a more luxurious place. They are typically looking to have all amenities and utilities installed, and just use the house as their own, without having to bother with anything else.
Some companies even rent such apartments for a long period of time, if they have to do business in a certain city for a while, and have all their employees use it when they are on a business trip.
Investing in real estate does not necessarily have to be done the traditional way. As we enter the third decade of this millennium, make sure you explore all your possibilities, before deciding on one that best suits your needs and expectations. Whether you choose to invest in real estate the classic way or decide to give one of the above-mentioned suggestions a go, make sure you do your homework and know what you are getting into before making a choice.