Investment properties are much more than the rental homes commonly associated with white picket fences. For more conventional investment properties, consider working with a property management company to oversee the property in an organized fashion. However, if you are looking for a more creative investment property, consider an income stream that can be both attractive and profitable by investing in weird but interesting options such as haunted houses and art galleries.

1. Small houses

Tiny homes are generally more affordable to purchase than larger homes, which can make them an attractive option for people interested in purchasing their first investment property. The tiny home market has grown over the years and provides an opportunity for a creative investor. For example, an interested investor has the opportunity to create an entire neighborhood of tiny houses. If such a project seems too ambitious, consider the convenience of adding a small house somewhere on your property and renting it out. A tiny house on your property has the potential to generate consistent cash flow while remaining practical and manageable. Before deciding to build, check the rules for accessory dwelling units (ADUs) in the neighborhood.

Interested in owning a tiny house? Start with an investment property loan.

2. Houseboats and Motorhomes

Houseboats and RVs have the potential to provide significant profit margins during peak rental seasons. Consider popular vacation spots that can help increase the value of your houseboat or RV. For example, houseboats and RVs located near prime vacation spots or trendy tourist spots can charge upwards of $300 per night. Investing in a houseboat or motorhome rental can generate impressive cash flow during peak seasons like summer. Keep in mind that houseboats are different from other investments and usually depreciate over time. In general, houseboats and motorhomes have the potential to generate substantial funds when placed in the right place, properly maintained and competitively priced.

Interested in owning a houseboat? Start with an investment property loan.

3. Haunted houses

Haunted houses have the ability to fetch a substantial amount of money in the fall. Consider a prime location to attract more pedestrians and stay close to other attractions. It is possible to have a more than profitable haunted house after an impressive haunting season. It is recommended to maximize profits made during spooky season by giving yourself as much time as possible to attract customers. For example, some horror events and haunted houses open as early as the first week of September.

Consider buying a house that has an urban legend behind it to add to the notoriety of the property when it comes time to captivate and scare your haunted house guests. One of the main advantages of buying a house considered haunted is that it is often cheaper than the rest of the market. Of course, there could be some spooky surprises along the way with such significant price reductions.

Interested in owning a haunted house? Start with an investment property loan.

4. Bed and Breakfast

Bed and breakfasts remain a growing industry that focuses on serving people interested in short-term stays. The beauty of a Bed and Breakfast (B&B) stems from an owner’s ability to earn money in a pleasant and comfortable setting by charging people who want to stay overnight in the house. Bed and breakfasts often offer a sense of privacy and calm in a building that offers a sense of charm. This comparative advantage often allows bed and breakfasts to be easily recognizable and marketed as a unique experience. When researching potential B&Bs, think about specific sites or attractions near the property, the unique features of the property, and the total number of guests you want to accommodate at one time. Good hostel!

Interested in owning a B&B? Start with an investment property loan.

5. Art Gallery

If you have a passion for art, consider renting a carefully purchased and designed space to artists. Art galleries are meant to showcase artistic talent while providing funds. Typically, art gallery owners earn income by renting space to artists, taking a percentage of art sales, and hosting glamorous events like galas and auctions. An art gallery is in many ways a partnership with an artist, so be sure to foster a positive working relationship. An important note to remember when setting up an art gallery is the importance of quality space. The gallery space should showcase and appeal to a specific niche in the massive art world. Keep in mind that galleries can lose money due to poor marketing or poor branding. Invest in promoting your brand and image to raise awareness of your business in the area and generate interest before you open.

Interested in owning an art gallery? Start with an investment property loan.

Increase your income with investment properties

Investment properties have the opportunity to be as fun and creative as you are. One of the benefits of some investment properties is that they can earn you money as the value of your property increases steadily over time. When purchasing an investment property, consider the level of time and effort you are willing and able to devote to maintaining and managing the property. For example, haunted houses that operate primarily in the fall will likely have different demands of time and attention than a bed and breakfast. Overall, investment properties can provide an alternative source of income in ways that are unconventional and able to accommodate a wide range of budgets.

Frequently Asked Questions

When looking for attractive investment properties, combine your creativity with your financial knowledge to select the perfect property. If you have questions about a particular property or transaction, consider speaking with a real estate or finance professional.

What is the down payment for an investment property?

The general down payment for an investment property tends to vary depending on factors such as the borrower’s credit rating and the specific type of rental property. A lower credit score will likely indicate that an individual will have to pay a higher than average down payment. Investment properties already have higher interest rates compared to other types of real estate, so buying an investment property with a poor credit rating may require a substantial down payment at a rate much higher interest. The reason investment properties generally have higher interest rates stems from the understanding that people are more likely to default on loans for their investment properties before defaulting on a loan associated with their primary residence. . In terms of minimum down payment, it is common to put at least 15% down. Keep in mind that paying larger down payments helps lower interest rates and can promote better loan terms. If possible, consider placing a down payment of around 20% or more to help lower interest rates.

How many investment properties do you need to retire?

The amount of investment property an individual needs for retirement depends on the properties in the local market as well as an individual’s expected monthly financial needs. Consider how much you will likely need to get on a monthly basis to live on. When calculating the number of investment properties you’ll need in retirement, keep in mind that passive income from rental properties generally declines with standard expenses such as maintenance. In general, the market has not set a minimum number of investment properties that a person needs to retire. However, a person can roughly calculate the number of investment properties needed to retire based on cash returns versus expenses.

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