As nice as it would be to be able to look at a house and instantly make money off of it, life sadly does not work that way. In order to make money off a house, you must first own that house. If you have a house that someone else would like to have, you can potentially make thousands of dollars in profit. This is why real estate is one of the best investments there is.

Real Estate: Your Best Investment

Even though I have nearly 50 years of experience in the investment industry, buying houses is still something I prefer over commercial buildings, and even multifamily housing.  Why, you ask? Simply put, houses require the least amount of effort to make money off of. Many people have the misconception that apartments and commercial buildings require less work for a bigger profit. This is simply not true. The thing is, after having owned many of these kinds of properties, there is something I have learned. Tenants come and go; the buildings always need to be maintained and refurbished; new tenants need to be found as soon as the old ones are gone. Rentals just require more work to keep them profitable. Even worse, if you have a legal dispute in a commercial building, you're going to be paying out the nose in legal fees, even if you're clearly in the right. This is especially true for businesses that have a big brand name to them. "So just don't rent to them!" you may be thinking. Except in order to entice customers to your commercial building, you need those big brand stores.

There is also the nightmare of a tenant who doesn't pay their rent on time. This is true in both commercial buildings and apartment complexes. If a tenant is in dire financial straits, they will declare bankruptcy and you won't see a single penny that you're owed.

Ideally you want tenants that take care of your building and pay their rent at the same time. You have to find renters who don't have good negotiating skills and who need you more than you need them. On the flip side, owning houses lets you help other people sell their houses as well. Where I live in Idaho a Realtor can make some really good money by doing this. Of course, depending on where you live, you will have to look up the laws for your area to see what you can do regarding selling houses you don't own.

The first thing you can do with houses is rent them to people in need of a place to live. If you decide to sell the house later, you can help those people find a new place to live and maybe get a commission by buying out another house from someone who can't make payments on it. In turn, you get to help a family in need, which is a very rewarding feeling. Of course, you make a nice profit by doing this.

Investment Properties And Their Issues

Unsurprisingly, other investors are most likely to be the buyers of an investment property. Also unsurprisingly, they want to buy it for an under market value and for a very low down payment so they don't lose much money on the outset. After all, they don't plan on living here. They want to flip it and the mortgage as soon as possible. A deal will eventually fall apart since the investor won't be able to get a loan for the full amount you're asking.

You also must keep in mind the economy, which greatly influences property worth. Houses and commercial properties don't just increase in value by existing. The location and the housing market play big roles in determining if your house is worth more or less in the coming years.

How Houses Are Different

The most unique investment opportunity is the average family house. You can make money off them whether they're empty or full. Obviously you can make some side income by renting a house from month to month. But you can also make money by letting it sit and appreciate. Either way, you're going to win.

Meanwhile, commercial and apartment properties depend on how much revenue it can produce while it's at max capacity. Leasing an apartment for under market value will make it depreciate in the long run. But a house will almost always appreciate whether it's empty or full.

There's almost no safer investment than a house. You can get a small down payment which will cost you less money than buying a commercial property. This gives you less risk. Also, lenders at banks or elsewhere will finance more for a house than other kinds of properties. Secondly, there are more buyers shopping for a house than any other kind of property. Houses can be sold in quite the hurry if you're in a prime location and need some quick cash. Of course, you can also sit on it and instigate a bidding war between buyers. As previously stated, you can also rent the house out for some consistent cash. Once again depending on the area, you can rent it out quickly with very few vacancies, which is a huge step up

from trying to rent an apartment. Sometimes commercial properties will sit empty for months and years, especially during a tough economy.

Anxious Sellers: Dealing With Them

You usually deal with a homeowner in a hurry to sell when you buy a house. This is good for you, since it means you can get a house for a lower rate, leading to great bargains and more money saved. What you learn from this experience is that you should never sell in a hurry even if you got that house from someone else selling it in a hurry. A good house flipper is someone who can negotiate well. Always try to out-negotiate the person you bought the house from.