Real estate investing is much more than buying a property and hoping its value will increase. Among other things, RealSuccess will guide our students on the various types of real estate investment properties and how to obtain the biggest return on investment (ROI). Read more to learn about the four main types of real estate investment options.

Below are ten real estate categories with different ways to invest to earn a profit. The best one for you is something only you can decide, according to your particular needs. To help you do that, I’ve listed a couple of good points and bad points for each type.

1. Renting single-family homes. 

Good points: An easier way to get started, and good long term return on investment. 

Bad points: Being a landlord isn’t much fun, and you typically wait a long time for the big pay-off. You also lose all your income when a house is vacant.

2. Fixer-uppers. 

Good points: Fast return on your investment, and it can be more creative work. 

Bad points: More risk (many unpredictables), and you get taxed heavily on the gain.

3. Low-income housing. 

Good points: Similar to any other rentals, but with higher cash flow. 

Bad points: Similar to any other rentals, but with more repairs and tenant problems.

4. Selling rent-to-own houses. 

Good points: If you buy, then sell on a rent-to-own arrangement, you get higher rent, and the buyer is usually responsible for maintenance.

 Bad points: Bookkeeping can be tricky, and most tenants don’t complete the purchase. This can be an advantage too, but it does mean more work for you.

5. Commercial properties. 

Good points: Multi-year triple-net leases mean little management and high returns. 

Bad points: A tough market to break into and you can lose income on vacant storefronts for a year at a time

6. Land split and resold. 

Good points: Simpler to real estate investments, with the possibility of great profits. 

Bad points: It can be a slow process and you have expenses, but no cash flow while you wait.

7. Boarding houses. 

Good points: You’ll generate more cash flow renting a house by the room, especially in a college town. Bad points: You’ll generate more headaches renting a house by the room, especially in a college town. College students are usually less reliable and are not as responsible for maintaining the property. There may be more damage to the property if the wrong tenant is selected.

8. Invest cash, sell with terms.

 Good points: A high rate of return is possible by paying cash to get a good price, and selling on easy terms to get a high price AND high interest. 

Bad points: You need a lot of cash and you tie up your capital for a long time.

9. Invest, live in it, sell it.

 Good points: The tax law lets you fix it up and sell it for a big tax-free profit after two years (if you live in it) then start the process again. 

Bad points: You may become attached to your investment and you’ll have to move a lot.

10. Pure speculation. 

Good points: You can make large profits buying in the path of growth, holding until values rise, and it is a low-management investment. Bad points: Growth in value isn’t always predictable, you have expenses with no income while you’re waiting, and transaction costs can eat much of the profits.

There are many ways to invest in real estate. These ten are just to get you thinking about what is possible, and what type of investing suits your personality. Once you figure that out, you may want to look into other categories of real estate investment.