You've come into some money and you want to invest it in something that has the potential to either make you wealthy now or in the future. You've decided to roll that money into something tangible: property. The equity on a piece of land or a home builds over the years until you can resell it at the right time and gain a profit. But exactly what type of property do you invest in?
The most common investment property is a home, your primary residence. Once you have purchased one, you begin to build up equity that can later be turned into cash if needed. The condition of the house, inside and out, as well as the property it sits on, are all factors in the value of the property. This type of investment also seems to be the most stable even when the market is fluctuating. Also, any improvements you make in your own home adds value to the property.
If you already own your own home, them you may want to consider investing in a second home, one that can be used as a vacation getaway or rental property. Make sure you take into consideration the area you are prospecting and the future resale value of the property. As much as you like the little cottage in the woods, it may not appeal to others, especially with the shifting market. Older couples will be looking for easy to care for homes in scenic areas, so consider a second home in a place such as a golf course. If you want to rent the property when you're not there, look in tourist areas. Because you as the owner would spend a certain amount of time there, it's not considered a rental property, but a dual-use home instead.
Rental properties are the investment properties that will generate income. Research what is available in your area, such as a low-income housing community or nearby college. Or if you live in an area where your renters could be upper-class, look there as well. These are all areas where a rental property could turn a good profit. Make sure you do your math, though, if you are looking to use this property solely for income. You will need to make sure that maintenance, management fees, utilities (if included in the rent), property taxes, and of course, the mortgage, can all be paid from the rent before being able to count on what's left as income.
Land is also another investment possibility. The best way to place a value on the land is to know before hand exactly what you intend to build on it. Knowing how much it will cost to add a home to the land is added to the land price itself to come up with its total worth. Be wary of property that could be contaminated. Have the land surveyed for any possible contamination and contact your local environmental protection office and inquire about it. It's better to be safe than sorry, especially if the land has been left for sale for quite some time.
Any of the above property options are wonderful investment choices. Whether you choose a second home for those weekend getaways or land for that retirement home, always research the history of the property, and make the most informed decision you can. If you do that, the money you invest in these properties will be money well spent.