Summary: Choosing the right investment asset class can feel like a BIG decision. But today, you’ll learn all about 3 top investment styles, and which asset is right for you, right now! Let’s match your investment asset to your current needs and goals.
Life changes alllll the time. 😖😖
The season you’re in now might be totally different than the one you were in, say 10 years ago, right? And if we’re talking truth (which you KNOW we always are 😉) you will not be in your current phase of life forever. You’ll face plenty more changes and shifts along your journey!
While that keeps life exciting, it also brings up an important question about when you should invest in what asset class.
You might venture into several different types of investing throughout your life. That’s simply because different investments are suited to the different phases you will find yourself in.
The assets you choose to invest in will depend on your lifestyle, goals, needs, income, etc. And guess what…you don’t have to stick with ONE asset class forever!
You can start investing right now, in the real estate investment asset that is right for you at this very moment. No need to wait for your life to totally change. Instead, let’s start putting your income to work for you now, so your life can start to change for the better. 🙌
We’ve put together this cute little resource as a way to help you match the right investment style to your current lifestyle. 😍😍
We’ll lay out 3 of the top real estate investment options – what they are and what they have to offer. Then, you’ll learn how each of them can benefit different people at different times. Don’t worry, this knowledge will have you excited about the right asset class for you, and how to get started ASAP!
Here’s what we’ll cover today ⏬
- All about single-family home rentals
- Now, what’s up with short-term rentals?
- We could NEVER leave out apartment syndication
- Matching the right asset class to your needs
All about single-family home rentals
First up on our real estate investment asset deep dive… single-family home rentals! We have a lot of love for this investment style, because it’s how we started our own investment journey.
At the time, it was totally the best way for us to get into passive investing. Because, here’s the thing: we had a serious need for control. Like, we wanted to be in the know of what was happening to our hard-earned money as we put it to work.
Can you blame us? We pretty much founded the CIA (control issues anonymous). 🤣
But seriously. Single-family home rentals are a great place to start your real estate investment journey. You get to be on the title, sign for the loan, and get 100% of the profit. Of course, the profit comes AFTER you pay your costs like mortgage, fees, and insurance.
It’s also nice that 🏡 single-family home rentals give you more liquidity compared to other asset classes. If you need access to your cash and can’t have it tied up for 5+ years, this could be a solid investment style for you.
Single-family home rentals work well as an investment when you get into the right markets, find the right tenants, and hire the right property management team. So, gaining proper knowledge is verrrry important when you start looking to invest in this asset class.
Speaking of tenants, when you have only one tenant, you face a bit more liability. If that one tenant doesn’t pay on time, or ends up being a total flake, you’re still responsible for paying down the mortgage. If you have a long vacancy, that can also be rough on your projected cash flow.
BUT, a duplex or a quad-plex gives you more tenants that are paying you directly. This can lessen the financial load and risk for you significantly.
Overall, single-family home rentals are in pretty high demand, encourage long-term renters, and offer a good opportunity to grow your income.
Hold up, though, let’s see some other options before you dive head first.
Now, what’s up with short-term rentals?
Short-term rentals, as implied by their name, are properties purchased to be rented out for days or weeks at a time. These aren’t homes that people are living in and making their own. They offer temporary housing that might be used for a vacation or short trip.
The really great thing about short-term rentals is that they can bring in even more cash flow than single family home rentals. For one, the prices are higher than what rent would be for long-term renters.
The math is simple. 🧮
The income is higher at a $1,500 per week rate, vs. $1,500 per month for long-term rentals. With weekly turnover, you can make some serious dough.
The properties are also usually nicely furnished, well-maintained, and in a desirable area – which makes people more willing to pay higher prices to stay.
Short-term rental investors also have the benefit of lots of deductions on fees. Things like cleaning, maintenance, utilities, and insurance are all possible deductions that can offset investors’ taxes.
Come on…who doesn’t LOVE a tax deduction… or several?? 😏😏
In all honesty, we have some friends that are totally killing the short-term rental investment game. There’s definitely cash to be made with this asset class.
If you’re wondering why the Kitti Sisters have never jumped on the short-term rental train, the answer is simple…it just hasn’t been the right fit for our own needs and lifestyles.
As much as we love lots of cash flow and tax deductions (two of our fave things in the world) we prefer a more passive investment style. We just don’t have the time to devote to staying on top of the responsibilities in short-term rentals.
But hey, if you’re in a season of life where that sounds exciting and fun, then this could be a great option for an investment.
Keep in mind that location does matter for short-term rentals. It’s not legal everywhere, and different places may have different restrictions or policies. While every investment style comes with its own form of risk, we would be concerned about rules suddenly changing for short-term rentals.
And just like that, we’d have a lovely investment property that no one would be able to rent. If you want to learn about current limitations, check out this resource about Airbnb.
We could NEVER leave out apartment syndication
Okay, time for our favorite investment asset… 🏢 apartment syndication. 😍😍
Juuuust to be clear, we still fully believe that different types of investments are good for different phases of life. Our ultimate love 💚💚 for syndication does NOT take away from that.
Personally, we started out by investing in single-family home rentals because it was the right thing at the right time. We wouldn’t change our experiences or the knowledge we gained in that season of life.
But finding apartment syndication was a total game changer. It allowed us to pursue our other interests and priorities by giving us back our TIME through passive income.
There are lots to love about apartment syndication. Cash starts flowing on day 1, you can hedge against inflation, and there’s an 80%-100% projected return after a 5-year holding period…
Aaaand don’t even get us started about the extraordinary tax benefits!
The minimal risk is also a huge plus, especially in our current economy and turbulent market. Apartment syndication gives peace of mind through asset protection.
Now, if you need liquid cash, apartment syndication might not be right for you at this moment. You see, investments get tied up in a syndication property for usually about 5 years (sometimes more, sometimes less). That’s because investors need to wait for the property to be sold to get the full financial benefits.
Although, you can still receive cash flow distribution throughout the holding period. It just takes a bit to get the biiiiig payout at the end.
Oh, BTW, it’s totally worth the wait. 😜😜
The important thing to remember is that apartment syndication deals are largely handled by the deal sponsors. Investors have one main job – to fund the deal. After that, they really get to sit back and relax while waiting to get paid.
If you’re looking for your name on the title, portfolio diversification, or a truly hands-on approach, you have other great options available to you.
Butttt if you’re ready for the passive income lifestyle with awesome financial and tax benefits…apartment syndication might be your jam!
Matching the right asset class to your needs
Let’s put all this info into a quick game that will give you a good idea of where you stand in your investment journey. After all, we’re looking for the right investment for you NOW, not later.
➡️ Scenario #1: You’re someone who craves control over your investment.
Single-family home rentals might be the perfect investment assets for you. With control over every part of the investment process, you’ll gain tons of experience and knowledge, while putting your money to work for you.
➡️ Scenario #2: I like having control, but I’m worried about bad tenants.
This is where short-term rentals are a great option. Like single-family home rentals, you get your name on the title and lots of control over the day-to-day process. But when it comes to tenants, you get very frequent turnover, meaning you’re rid of potentially bad tenants fast. Plus, tenants tend to treat short-term rental properties very well, so bad bad tenants are a low risk with this one.
➡️ Scenario #3: I want someone else to handle the work but I still want to make lots of money.
If you’re looking for passive income that you can make while you sleep, play, or do whatever you want, apartment syndication is the BEST. Scale your wealth the simple way – by letting an awesome team handle the effort part, while you wait to get paid.
You also get access to bigger, more profitable deals, because you’re not investing on your own. After about 3-4 hours of due diligence on one deal, you can let your team make you money while you start planning for the next syndication investment.
No matter what investment style you choose, the Kitti Sisters are here to offer knowledge while cheering you on. If you’re thinking that apartment syndication sounds like your next financial move, we can help you get started ASAP. ✔️
For insider access to huge, life-changing passive income deals, join the Kitti Freedom Club today!
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