Investing in your retirement is an important part of preparing for the future, and one of the ways you can do this is by investing in rental properties. Real estate is a good investment, as you can rent out a unit and potentially have the rent pay for the property's expenses while its value grows and builds equity. But there are many types of real estate you can invest in as a residential rental. Here are three different types of properties you can buy to rent out as an income property.

Single Family Home

A single family home is a great traditional way to invest in a rental property. Single family homes provide your tenant with their own living space, possible fenced-in yard, garage, and other amenities. Many renters like the convenience of renting a home because they don't share any walls with their neighbors, they have added privacy, and they have the larger space a home can usually provide. And most homes come with a yard for their children or pets and a place to garden, which you cannot get in a condo or multi-unit apartment.

Just be sure if you choose to buy a single family home as a rental, make sure your tenant is able to handle any yard maintenance and lawn care. Your property's landscaping and lawn are a big investment you don't want to get destroyed. And some local city code enforcers can fine you if your lawn and landscaping become overgrown,dead, or weed-filled.

Rental Suite

If you are not yet ready to buy a single family home as a rental property, you can buy a home that contains a rental apartment. This opportunity will provide you with a home that includes a separate unit, either downstairs, above the garage, upstairs, or in an attached unit but still provides you with your own privacy. A rental suite attached onto your own home will have its own entrance and parking area.

Depending on the style of home and type of rental unit you choose to buy, this income option gives you the ability to manage your rental property from the convenience of your own home, so showing the unit and handling the yard maintenance is all taken care of onsite. And the rent you collect goes toward paying your mortgage and reducing your home ownership costs.

Multi-Unit Property

If you want to combine a property's expenses and provide multiple rental units with one property, a multi-unit property is the way to go. You can buy a multi-unit property with two or more units, such as a duplex, triplex, four-plex, or eight-plex, as examples.

Multi-unit properties can be a great investment, as they share the costs of property management, landscaping, and any maintenance by a contracted professional, and the rent collected goes to pay for your financing on the property, property management and maintenance fees. This allows you to realize a larger return on your investment of buying a multi-unit property.

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