What Type of Real Estate Investment Property is Right for You?

There are many different types of real estate investment properties available to investors interested in Chapel Hill real estate, Durham NC real estate, and Raleigh real estate. All specific versions cater to different buyer profiles who have certain budgetary, lifestyle, and quality of life expectations. Let’s explore these further so you can determine which ones you should focus on in your home search.

Residential real estate is a type of property used for housing and includes single-family homes, multi-family buildings, and apartment complexes. The main purpose of residential real estate is to provide a place for people to live. When offering residential Chapel Hill real estate, Durham NC real estate, and Raleigh real estate for rent, you usually remain responsible for property upkeep such as water heaters, HVAC, roofing, siding, and the like.

Single-family homes are properties consisting of only one housing unit. These homes are typically detached from other houses, meaning they have their own yard and driveway. As an investor in Chapel Hill real estate, Durham NC real estate, or Raleigh real estate, a single-family property offers you steady, long-term income from one family of tenants. It is common to rent these properties on a year or multi-year basis.

Multi-family buildings are properties that contain two or more families, such as duplexes, triplexes, and other residential properties with two to three units. Tenants of multi-family properties rent on a monthly, yearly, or multi-year basis. The benefit of a multi-family property over a single-family property is that you are able to earn income from two or more renters without having to purchase a second property.

An apartment complex is a type of multi-family building which contains four or more housing units. These complexes can be found in most metropolitan areas and are popular with both investors and tenants. As an investor of Chapel Hill real estate, Durham NC real estate, or Raleigh real estate, an apartment complex offers you the potential to earn income from a number of tenants and, as a tenant, you can enjoy the benefits of living in a larger community often with shared amenities like green space, entertainment areas, fitness centers, and more.

Light commercial property is a type of real estate used for businesses that do not require a large amount of space. These businesses include office buildings, retail stores, banks, churches, restaurants, and small shopping centers.

These can function similarly to single-family properties in that they usually house only one business tenant in the unit. Office buildings and small shopping centers, on the other hand, can offer a similar income structure to a multi-family or apartment complex in that multiple tenants are usually renting in one property. However, as a property for small businesses, investors in Chapel Hill real estate, Durham NC real estate, and Raleigh real estate are usually able to charge a higher rent than on a residential property.

Before investing in a property, it is important to think about your ideal tenant for Chapel Hill real estate, Durham NC real estate, and Raleigh real estate. Who do you want to rent the property to? How much income do you want it to generate? How often do you want to renew the lease?

A single urban tenant is a person who desires to live in a walkable, metropolitan environment. This type of tenant is often looking for convenience and wants to be close to work, shopping, dining, and entertainment. As an investor, properties with single urban tenants offer you stability and the potential for steady income even if the existing tenant needs to move for work or other concerns. By purchasing Chapel Hill real estate, Durham NC real estate, and Raleigh real estate in a prime urban area, it is easy to find tenants who are drawn to nearby amenities. If a single urban tenant is your goal, look for property near popular dining and shopping destinations or close to theaters, stadiums, or other entertainment venues. You may also want to purchase property near well-known business areas workers are often looking to shorten their commute.

A family tenant is a person looking for a place to live with their spouse and children. This type of tenant often desires a suburban environment where they have some space and can raise their children. As an investor, purchasing property that caters to family tenants can be a great investment. Families are often looking for long-term leases to allow their children to finish school with the friends they make. As such, if you find Chapel Hill real estate, Durham NC real estate, and Raleigh real estate near good schools, it is likely the family tenants will renew their lease time and time again. Note that it is common for family tenants to want pet-friendly properties, so you may want to look at real estate with a dog park, veterinarian, or pet-friendly park trails nearby.

A college student tenant is a young person attending college or university. This type of tenant is often looking for an affordable place to live close to campus. Many students want short-term leases so they can move out when their studies are complete. Additionally, many colleges and universities have regulations that require all students to live on campus for at least their first year, but investors are able to advertise to students in their second year and beyond.

For homes near a community college, investors can expect tenant turnover on a monthly, yearly, or two-year basis. If the property is near a four-year college or university, tenants may stay up to six years or more, depending on the degree they are pursuing. To target college student tenants, consider investing in an apartment complex or multi-family property near campus and other dining options, movie theaters, concert venues, and affordable shopping. If the property you purchase has more than one bedroom, you can charge a higher rent since students are often willing to split rent with roommates.

Regardless of which type of real estate interests you, working with a realtor who specializes in investment property can provide you with key insight into the best areas in Chapel Hill real estate, Durham NC real estate, and Raleigh real estate based on the types of property and tenants you desire. If you want to learn more, please don’t hesitate to reach out to Chris & Kevin Knapp for expert investment property advice for The Triangle.