Real estate is a popular investment choice for many people. While many people stick to single-family rental properties, there are several alternative investment options that can be just as lucrative. These investments are less common, which means you may find less competition when looking to add them to your portfolio. Keep reading as we discuss six alternative investments that real estate investors in Milwaukee should consider.
1. Commercial Real Estate Options
Commercial real estate can be an excellent alternative investment for real estate investors, encompassing shopping centers, office buildings, warehouses, and other commercial properties. These properties typically generate more income than residential properties and can offer a higher return on investment over time. Commercial properties can average a return of 10-12% annually, though they come with risks such as longer vacancy periods and higher management costs. Many investors partner with others to secure greater financing and pool resources, enhancing their investment potential and mitigating individual risk.
2. Investing in Milwaukee Mobile Homes
Mobile homes are another viable alternative investment option for real estate investors, known for being relatively inexpensive to buy and maintain. They can provide a steady stream of rental income, appealing to both novice and experienced investors. However, potential investors should be aware of legal issues related to land ownership and maintenance challenges. Mobile home investments can yield high returns, especially when investing in land for mobile home parks, which often require minimal overhead. Proper due diligence and understanding local regulations are crucial for success in this market.
3. Private Lending
Private lending allows real estate investors to earn returns without owning property directly. It involves lending money to other real estate investors to finance their deals, with the lender earning a fixed interest rate on the loan. This can be a lucrative venture, often yielding returns between 8-12%. However, private lending carries significant risks, including the potential for borrower default. It’s essential to conduct thorough due diligence, assess the borrower’s creditworthiness, and secure robust legal contracts. Consulting with a lawyer is crucial to protect your investment and ensure all legal aspects are covered.
4. Real Estate Investment Trusts (REITs)
REITs are a popular investment choice for many real estate investors, as they allow investors to earn income from a diversified portfolio of income-generating properties. REITs can be equity, mortgage, or hybrid, with equity REITs historically providing average annual returns of 10-12%. Investing in REITs enables investors to benefit from real estate without directly managing properties. However, it is crucial to research thoroughly and understand the specific REIT’s performance, fee structure, and market risks. Always fully research any investment partner to ensure the security and profitability of your investment.
5. AirBNB Rentals
Airbnb rentals present another attractive alternative investment option for real estate investors, often yielding higher returns compared to traditional long-term rentals. Short-term rentals can achieve occupancy rates of 60-80% in major cities, leading to substantial income. Additionally, Airbnb rentals offer greater flexibility and easier management through user-friendly platforms. However, potential investors should consider local regulations and seasonal demand fluctuations, which can impact profitability. Comprehensive market analysis and adherence to local laws are essential for maximizing returns from Airbnb investments.
6. Land Development
Land development is another alternative investment option for real estate investors. Land development involves buying land and then developing it for commercial or residential use. This can be a lucrative investment option, but it requires a lot of research and due diligence.
At Northwoods Property Resources, we understand that finding the right investment can be challenging. That’s why our professional real estate buyers are here to help. We can help you find the right investment that meets your financial goals and fits your budget. We have years of experience in the real estate industry and can offer valuable insights into the Milwaukee market.
Real estate investors in Milwaukee have several alternative investment options to consider. Whether it’s commercial real estate, mobile homes, private lending, REITs, AirBNB rentals, or land development, there is an investment option that can meet your needs. At Northwoods Property Resources, we can help you find the right investment that fits your financial goals and budget. Contact us today to learn more about how we can help you! (920) 851-9727