Brendan Mace is a serial entrepreneur who owns a variety of rental properties in the Vernon BC, Canada area. Brendan Mace also has an online presence on YouTube, where his channel has over 60 thousand subscribers. Brendan Mace reviews that his channel is meant to teach his followers how to grow an online business. Soon, Brendan Mace intends to launch videos on property investing. In the article below, Brendan Mace reviews the 5 types of real estate investments for future investors.
Brendan Mace reviews that swimming in the real estate investment waters is often suggested to individuals looking to generate long-term passive income. But industry success requires a broad range of strategy and asset knowledge to ensure the right investments are made.
From house hacking to crowdfunding, Brendan Mace reviews a list of ways first-time investors can get involved with this potentially ultra-lucrative hustle.
The 5 Types of Real Estate Investment
1. House Hacking
At its core, house hacking involves investors generating income from their own homes.
Typically, individuals buy a property with multiple units (e.g., a duplex or triplex) and reside in one unit while renting out the rest. The rent gleaned from tenants covers the mortgage, maintenance fees, and utility costs while turning a profit.
Brendan Mace says wise investors understand that house hacking is a relatively easy way to learn about land lording and property management while having their living costs catered for.
However, Brendan Mace reviews that individuals should consider whether this lifestyle is for them. After all, most landlords aren’t too keen about living next door to their tenants; they tend to suffer more frequent maintenance requests than off-site landlords. Although, it’s often a great way to kickstart a real estate investment career.
The Reality of Buying a Home to Hack
Despite popular perception, buying a multifamily property is no more difficult than purchasing a single-family home. They’re good to go if the investor plans to make the dwelling their primary residence and the mortgage is appropriately priced explains Brendan Mace.
Like mortgages for single-family abodes, investors have numerous mortgage options. The most common type is an FHA loan or VA loan for veterans. The former offers low-interest loans with a mere 3.5% deposit, making it perfect for house hacking.
Alternatively, new real estate investors can seek mortgages from eager private lenders. They’ll consider individuals’ debt-to-income ratio and credit score before approving the loan.
2. House Flipping
Meant for individuals with construction experience, house flipping involves buying dilapidated or outdated buildings, renovating them, and selling them for profit.
Flipping homes isn’t a source of passive income if the investor decides to do the manual labor themself. However, many choose to hire professional contractors. Although, this eats into their profit margins.
As real estate investments go, house flipping is the most time-consuming. Not to mention the riskiest according to Brendan Mace.
Experienced flippers encourage newbies to avoid underestimating costs. It’s a common mistake that has caused plenty of investors to break even or worse — lose money. Not to mention the capital gains tax they incur if they own the building for less than two years.
The Impact of COVID-19 on House Flippers
Pre-coronavirus pandemic, house flippers benefitted from whopping, wallet-filling profits. But Brendan Mace reviews that construction costs and house prices have massively increased in this post-pandemic world. So, first-time, and experienced home flippers are experiencing tighter profit margins.
3. Rental Property Buying
Buying an apartment or house to rent out is one of the most traditional forms of real estate investment strategies. Unfortunately, it can also be one of the hardest.
Brendan Mace reviews that investors begin by searching for a property priced appropriately. In other words, a home they can purchase and rent out to not only cover the bills but also make a profit.
Then comes the rental agreements — investors must consider whether they want to deal with short-term or long-term tenants.
Short-term rentals with companies like VRBO or Airbnb can generate considerable income, especially for investors residing in tourist sports. But the day-to-day work requirement is substantial.
On the other hand, long-term rentals negate the stress of late-night calls from tenants and allow investors to outsource work to property management firms. But in doing so, they lose some of their profits.
Getting Started with Rental Properties
Before purchasing a rental unit, individuals need knowledge of leasing, mortgages, tenant-landlord relationships, and property management. Knowledge is critical in this business whether they plan to be a hands-off or hands-on investor.
4. REITs
Brendan Mace reviews that a REIT or Real Estate Investment Trust involves investing in a firm that owns numerous property types, including hotels, apartment blocks, office buildings, malls, and more. Purchasing shares in a REIT gives investors access to a vast array of buildings.
It’s perhaps the fastest way to get involved in real estate. They’re great for investors who want a hands-off approach or a highly liquid investment.
5. Crowdfunding
When crowdfunding, investors put money into a large real estate project, such as a new hotel or housing unit. The money funds the construction says Brendan Mace.
It’s a less liquid investment than a REIT. As a result, individuals may find it tricky to secure buyers for their shares if they want to sell. Plus, crowdfunded projects often come with early withdrawal penalties.
