Real estate refers to a piece of land, as well as any buildings or resources on it. Industrial real estate refers to mines or warehouses.   Commercial real estate on the other hand includes places such as retail stores or offices. The most popular form of real estate is residential real estate which is used for private residences and involves the preparation of a residential construction estimate, as opposed to commercial one.

If you’re in charge of maintaining, purchasing, or selling residential land it is in your best interest to be aware of the property’s classification. This is because both commercial and residential real estate are governed by separate sets of laws and regulations.

Residential areas could be labeled into different forms. For example, there are classifications of normal homes, apartments, and even houseboats. Even more so, these residences can be found in neighborhoods ranging from the poorest slums to the most affluent residential subdivisions. Residential real estate is when someone purchases land that has been licensed for residential use.

Residential real estate is often a person’s most valuable financial asset.  The value of the real property on the estate is subject to market fluctuations that impact the price of the residence. Some people buy real estate with the hopes of profiting from it either by selling it for a profit, or by renting it out to others for a monthly fee. 

Is It A Good Idea For Me To Invest in Residential Real Estate?

In general, real estate is a great investment choice . It can provide recurring passive income and if the value rises over time, it can be a successful long-term investment. You might also incorporate it into your overall wealth-building plan.

Residential Real Estate Investments: What Are They?

Houses

• Since residential housing is in such high demand for both renting and selling, real estate investors may expect relatively consistent returns from this form of investment. This is due to its  high potential for capital growth..

• You’ll have to decide whether you want to buy a new home or an older property. While an older property can attract more tenants because of cheaper utilities , you may find  yourself spending money on repairs and improvements. 

• On the other hand, with more modern for newer residential properties, you’ll deal with lower maintenance rates, fewer upgrades, and more deductible expenses.  

Dual Key Homes

• Although dual-key homes appear to be one unit from the outside, they are actually two separate dwellings on the inside.

• The main advantage with this type of property is that they  can house two different parties/families under the same roof., As a result, the landlord can receive a “double rental income.” It should be noted that owning a dual key home, also known as a duplex, will require a more detailed rental agreement form to be signed by the tenants. Furthermore, the agreement needs to be state specific since the laws and statutes around dual key homes vary widely from state to state. Here is an example of a state specific Florida lease agreement form that has been updated for the current year, https://www.ezlandlordforms.com/florida/

• Dual-key homes are an appealing option for families with an elderly individual that wishes to live nearby their loved ones. However, these properties also work wonders for the younger populations. Dual key homes are beneficial for students because  they provide low-maintenance housing for students who want to live close to their campus.

Units and Apartments

For real estate investors, units and apartments are popular choices.

• Multi-family complexes, which are often located near amenities and public transportation routes, have a relatively healthy potential for capital development.

When it comes to budgeting for this type of investment though, there are a few things to keep in mind:

•  Most multi-family complexes have a body corporate manager who oversees the upkeep of common areas and exterior building posts. They normally charge a corporate strata fee or tax to cover the cost of maintaining elevators , pools, and other services that the corporate body is responsible for. 

• The cost of these services are determined by the amount of maintenance calculated in the beginning of the fiscal year.

• Keep in mind  that if you intend on renting  homes, you should be aware of your tax obligations. Furnished apartments are perfect for the financially savvy investor who can keep track of maintenance costs and deductible expenditures for tax purposes.

Holiday homes

Purchasing a vacation home could be quite nice . However, with this form of real estate investment, you must consider the big picture, particularly if you intend to rent out the property when it is not in use.

Although investing in the right vacation home will result in excellent rental returns and a healthy profit margin if you plan to sell down the road, there are a few things to keep in mind when making this form of real estate investment:

• If you want to rent out the property for a portion of the year, you should be mindful of the tax laws that might apply to your investment.

• The best course of action is to seek the advice of a financial planner who will help you recognize your tax obligations and minimize your expenses as a result.

You Need an Expert

Real estate is one of the most common investment assets available. However,  have you considered the  types of  investments available and how they could affect you down the road?

Different investments will work and act differently, so before you buy, think about what is best for your budget and strategy. Whether you want to invest or live in residential real estate in Florida, you will need to hire an expert to give you a rundown of the buying process. Contact one now!