Different Types of Real Estate Investments

Real estate is one of the greatest ways to build wealth, no secret there. Now there are hundreds of different ways to invest in real estate...maybe even thousands! I will share with you the four types of real estate: residential, commercial, industrial and land. Let’s get going:

Residential - Residential properties include: single-family homes, multi-family homes (2-4 apartments), mobile homes, townhouses, and condos. Each type can generate investment returns in different ways like, capital gains from a fix & flip, appreciation, rentals, and Airbnb to name a few. Residential real estate is a great way for new investors to get in the game! A great way to do this is called “house-hacking”. House hacking is where you buy a property, then rent out the other rooms or units to cover your expenses as the home owner! This genre of real estate is relatively well known and I’ll dive into more specific points in further posts.

Commercial – This is property used for retail purposes, office space, and apartment buildings containing 5 or more units. Investors buy these properties and rent them to business owners who need space to run their companies, buy and sell goods and services, and large apartment complexes. You’ll see these spaces all around the city or town you live in, you’re favorite restaurant, morning coffee stop, the local fashion store, that brewery on the corner and that new apartment complex your best friend just moved into. Commercial properties are a great way for investors to spread out their portfolio and offer favorable leasing options for the owner along with some great returns. Now commercial real estate can be more complicated and difficult to get into...but that’s why you’re here investing in your education!

Industrial - Industrial properties typically include buildings used by companies for the manufacturing, warehousing, and distribution of their product. Savvy real estate investors know that industrial space can generate some amazing returns with very few expenses. They often yield higher returns with longer leases, turnover rates are much lower, and favorable lease options where the tenant/company pays for a majority/all the monthly expenses. However, on the flip side, the building could sit vacant for a long while in between tenants due to the uniqueness of this real estate class. Now I would say industrial real estate investing is one step higher than commercial, with regards to difficulty entering the market and overall understanding of the investment. This is a great next step to take to get to that next level of real estate investing that you’re striving for!

Land - Buying land is a proven investment strategy that can produce healthy returns. Generally buying raw land won’t net you any passive income unless you get creative (leave a comment for creative uses of land below!!) Land in a popular location or spot that could be the site for future development can pay off handsomely in the future. There is generally less competition with vacant land as well, individuals don’t see the potential, can’t see possibilities of passive income, impatient, and land’s just “too boring.” All this can be more lucrative to a knowledgeable land investor!

Now this is a very quick, simple, and shallow over view of each category aiming to get the new investor’s feet wet or a quick re-fresher read to a seasoned investor. All this well I work on improving my skills and goals to become more active blogger! I’ll be looking to dive in deeper on these categories along with some other methods to invest in real estate soon! Please let me know what you think along with any constructive feedback, questions, etc and just reach out with a follow or connection here on BP!

Thanks for reading, great job continuing your education, and don’t forget to comment your thoughts!

Aug. 12, 2022

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Inventory is Going Up

Low inventory has plagued the U.S. housing market throughout the pandemic-inspired real estate boom. Now it’s growing at a record pace, according to a report Tuesday from Realtor.com.

The number of active listings was up 30.7% in July, the fastest pace on record and the third consecutive month of inventory recovery, the data showed. 

“The U.S. housing market continues to move toward more evenly balanced supply and demand compared to the 2021 frenzy,” Danielle Hale, Realtor.com’s chief economist, said in the report. 

“Our July data shows elevated mortgage rates left many buyers tightening their budgets and sellers responding with price reductions, while home shoppers who kept searching saw more available options.”

Regionally, the West saw the biggest annual increase in inventory, 68.9%, according to the report. The South was second, with a 51.6% surge, followed by the Midwest (10.2%) and the Northeast (3%).

However, nationally, supply is still down 44.4% compared to July 2019, the report said. 

In addition, new listings in the U.S. also ticked down 2.8% annually in July, “suggesting that some prospective sellers are wondering what recent market shifts mean for their plans to list,” Ms. Hale continued. 

“But data indicates that homeowners grappling with this decision are still in a good position in many markets, with buyer interest keeping well-priced homes selling quickly,” she said. “Plus, many sellers have a substantial equity cushion to leverage, thanks to the past decade of rising prices. Whether or not they take advantage of these opportunities will be key to inventory trends moving forward.”

Meanwhile, home prices remain elevated. The median listing price of a U.S. home rose 16.6% year over year last month, reaching $449,000, the figures showed. That’s nearly 40% higher than it was in July 2019. 

Asking prices were up in 47 of the 50 metro areas tracked in the report. Miami, which has attracted droves of buyers able to work remotely during the pandemic, saw the biggest spike in prices in July, 36.2%. Memphis, Tennessee, had the second largest jump, 32.7%, followed by Orlando, Florida, where they rose 28.4%. 

The three cities where prices declined were Rochester, New York (3.1%), Pittsburgh (3.1%) and Cincinnati (2.9%). 

Mansion Global is owned by Dow Jones. Both Dow Jones and Realtor.com are owned by News Corp.

Posted in Blog Posts
Aug. 4, 2022

Mortgage Rates Are Falling

Today’s mortgage rates: 30-year rates tumble back below 5% | August 4, 2022

20-year rates also nosedived, so buyers may want to lock in a rate today while they’re relatively low for longer repayment terms.

Our goal here at Credible Operations, Inc., NMLS Number 1681276, referred to as "Credible" below, is to give you the tools and confidence you need to improve your finances. Although we do promote products from our partner lenders who compensate us for our services, all opinions are our own.

Check out the mortgage rates for August 4, 2022, which are mixed from yesterday. (Credible)

Based on data compiled by Credible, three key mortgage refinance rates have fallen and one has risen since yesterday.

Rates last updated on August 4, 2022. These rates are based on the assumptions shown here. Actual rates may vary. With 5,000 reviews, Credible maintains an "excellent" Trustpilot score.

What this means: Three key mortgage refinance rates fell today, with rates for 20- and 30-year terms plunging back below 5%. Rates are likely to continue to fluctuate, meaning homeowners looking to refinance may want to lock in a low rate now ahead of future increases.

Today’s mortgage rates for home purchases

Based on data compiled by Credible, mortgage rates for home purchases are mixed since yesterday, with two rates falling, one rising and a fourth holding steady. 

Posted in Market Updates
July 19, 2022

The 10 most stable housing markets in the United States, ranked

The housing market and the economy at large have taken a wild ride this year, with home prices clinging to historic highs and mortgages hitting rates far surpassing the lows of 2021.

Combined with inflation, the rollercoaster ride has given homebuyers pause, even as it signals a gradual recovery of housing inventory.

Realtor.com now anticipates home sales to decrease by 6.7 percent over the course of 2022, compared to previous forecasts of sales increasing by 6.6. percent.

Where’s the best place to wait out all the ups and downs in the market? According to an analysis by CNBC that weighed each state’s economic health, annual home price appreciation, new construction per year and foreclosures and insolvency from the first quarter of 2022, Utah has the most stable housing market in the country right now.

The financial news outlet drew data from the recently released CNBC America’s Top States for Business study, the Federal Housing Finance Agency (FHFA), the U.S. Census Bureau and Attom Data Solutions.

2022 Economy ranking: 6

Home price appreciation: 27.1 percent

Housing starts per 1,000 people: 12.2

Foreclosure rate: 1 in 2,063 housing units

Underwater mortgages: 1.4 percent

Utah, undoubtedly, has a hot housing market right now.

The state boasts the second-highest rate of rising home prices in the country, but also the fastest rate of new construction. In addition, its foreclosure rate is low and the economy is in a strong position.

2. Washington

Seattle skyline

Seattle | Photo by Luca Micheli on Unsplash

2022 Economy ranking: 3

Home price appreciation: 20.1 percent

Housing starts per 1,000 people: 7.3

Foreclosure rate: 1 in 4,965 housing units

Underwater mortgages: 1.2 percent

Although Seattle has often been pinned over the years as a city with a severe housing crunch and affordability issues, the state’s sustained economic growth has helped place it in a strong position on this ranking list. Additionally, foreclosure rates and underwater mortgages are quite low.

3. Florida

St. Augustine | Lance Asper / Unsplash

2022 Economy ranking: 4

Home price appreciation: 25.7 percent

Housing starts per 1,000 people: 9.6

Foreclosure rate: 1 in 1,211 housing units

Underwater mortgages: 1.4 percent

There have been conflicting reports over the course of the pandemic about whether or not everyone is moving to Florida, with its attractive weather year-round and favorable taxes.

Still, rising prices and rates of construction reflect strong demand, at least for now.

4. Texas

Austin, Texas | Carlos Alfonso / Unsplash

2022 Economy ranking: 8

Home price appreciation: 19.3 percent

Housing starts per 1,000 people: 8.9

Foreclosure rate: 1 in 2,326 housing units

Underwater mortgages: 2.5 percent

Texas is another state that’s seen a lot of press in the last few years for its growing population, as buyers in pricier markets like California got fed up with the competition during the peak of the pandemic-fueled housing market.

In response, home construction is up to help meet demand and there are plenty of qualified buyers ready to adopt those new homes.

5. Idaho

Boise, Idaho | Click Sluice / Unsplash

2022 Economy ranking: 5

Home price appreciation: 27 percent

Housing starts per 1,000 people: 10.5

Foreclosure rate: 1 in 6,015 housing units

Underwater mortgages: 1.6 percent

Boise has consistently ranked as one of the nation’s hottest markets, contributing to overall strong housing demand throughout the state.

New construction is helping bolster the state’s inventory, CNBC’s report noted, but foreclosure rates are also on the rise (albeit still, quite low compared to other states), which may be a warning signal if the economy takes a sharp downturn.

6. Tennessee

Nashville, Tennessee | Brandon Jean / Unsplash

2022 Economy ranking: 2

Home price appreciation: 24.1 percent

Housing starts per 1,000 people: 8.2

Foreclosure rate: 1 in 2,797 housing units

Underwater mortgages: 2.9 percent

According to CNBC’s analysis, Tennessee has the second strongest economy in the country behind North Carolina.

The stable housing market and rising prices have largely contributed to this factor. However, the report also warns that foreclosures and underwater mortgages have been on the rise.

7. Vermont

Champlain Valley, Vermont | Kevin Davison / Unsplash

2022 Economy ranking: 33

Home price appreciation: 2o percent

Housing starts per 1,000 people: 3.2

Foreclosure rate: 1 in 13,930 housing units

Underwater mortgages: 1.1 percent

Individuals seeking an escape from larger cities have given Vermont’s housing market a boost, contributing to rising prices and new mortgages. Despite these healthy signs, the state’s economy and new construction have both lagged, bringing down Vermont’s overall ranking.

8. Arizona

Piestewa Peak, Arizona | Kyle Kempt / Unsplash

2022 Economy ranking: 22

Home price appreciation: 27.4 percent

Housing starts per 1,000 people: 9

Foreclosure rate: 1 in 1,861 housing units

Underwater mortgages: 1.4 percent

Arizona has become another Sun Belt hot spot, with spiking home prices and low inventory.

However, the state’s construction surge should provide some needed relief. Increasing foreclosure rates are something to keep an eye on, CNBC’s report noted, but home equity generally is in a strong position.

9. South Carolina

Charleston, South Carolina | Leonel Heisenberg / Unsplash

2022 Economy ranking: 13

Home price appreciation: 21.4 percent

Housing starts per 1,000 people: 9.5

Foreclosure rate: 1 in 1,081 housing units

Underwater mortgages: 3.4 percent

South Carolina is in the midst of a very heated market, with tight inventory and regular bidding wars, helping prices to continue to rise.

However, strong new construction starts should eventually help mitigate that demand in upcoming months.

10. South Dakota

Mount Rushmore, South Dakota | Ronda Darby / Unsplash

2022 Economy ranking: 12

Home price appreciation: 20.1 percent

Housing starts per 1,000 people: 8.8

Foreclosure rate: 1 in 17,724 housing units

Underwater mortgages: 4.8 percent

South Dakota’s economy is in good standing with home price appreciation still going strong and housing starts also at a healthy pace.

The foreclosure rate is extremely low. However, with underwater mortgages increasing, some trouble may be brewing for the housing market, CNBC noted.

Email Lillian Dickerson

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Homelight Achievement

We earned a Homelight Achievement for 2019! Real Estate Agents earn this award when they rank in the top 5% of agents in their area based on historical real estate transaction data. Each year, Homelight awards agents at both the local and national levels for excellence in 3 distinct categories. As winners of Homelight Achievements we're proud to represent some of the top-performing agents working in America today. 


2019 Homelight Achievement Award

Nov. 13, 2019

Procrastinating On Investing: Just Try It

Still on the fence and dragging your feet about making a real estate investment?

Just try it.

Imagine the Wright brothers never attempted flight. Imagine Benjamin Franklin never tried to invent electricity. Imagine Columbus never set sail. The world would be a lot different right now.

They didn’t have it all figured out when they started, but it worked out pretty well. The same can be said for the efforts of Elon Musk, Bill Gates, Warren Buffett, Sam Zell, and many others.

Real estate is a proven investment. It’s benefits have been proven for thousands of years longer than the stock market or cryptocurrencies. 90% of millionaires have made their money in real estate. There aren’t any billionaires who don’t own any or a lot.

Whether you just want to improve your financial position now, grow your wealth, future proof your income, optimize your finances for fewer taxes, or secure passive income streams for when you can’t work, or ensure your family is provided for when you can’t be there, real estate stands out as the best solution.

You may never have mastered every one of the finer points of real estate and investing. There is a lot to know, and things are constantly changing. Yet, you’ll never get any of the benefits unless you try it. You can always improve and tweak as you go and make your next investment better than the last.

It’s virtually always the things we don’t try that we regret, not those we do. The best day to have gotten started may have been yesterday, but there won’t be another day as great to get going like today.

You can take the DIY approach and buy your own rentals or try to flip houses yourself. You can take little baby steps and de-risk it as you go. Or you can partner with experts who have mastered it already, and have teams of people to make sure everything runs well, and just get the benefits while they do all the hard work.

Learn from them as you go. Make on investment. Watch how it performs. Then improve or simply repeat.

Whether it is for wealth preservation or growth, the tax-saving benefits, passive income or the returns, real estate investing is hard to beat. There’s nothing that offers this level and balance of stability and upside potential.

Start with a small investment today if you don’t have any real estate in your portfolio. Or expand and try something new, or upgrade to apartment building investing if you haven’t tried it yet.

You are the only thing holding your finances back. You are the only one who can make the breakthrough by taking small and easy actions to change that.

Make a new investment today...

Bill Zahller

Posted in Blog Posts