Alternate Residential Investments

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Alternate residential investments.

When you’re thinking of alternate residential property investments, what that really means is outside of the traditional house and land, unit, townhouse, what type of investments are there? So to give you an idea you can actually even combine things like duplexes, dual occupancies, triplexes, unit blocks into alternate residential.

If you decide to keep them separate, well, what is alternate residential? These are assets where you’ve got boarding potential, perhaps rent out to Airbnb, perhaps unit blocks of four and beyond certain unit blocks of four. Really with alternate investments, you can even throw in development blocks, subdivisions, renovating deals. They’re just more for your active investors.

When thinking of why you’d want to look at adding alternate residential property, it’s because you’re trying to accelerate your goal without having to wait for a particular market movement. So example, if you buy a home and maybe you’re thinking of, “Great, I like the location, I like the drivers of this place. I like the cashflow based on where it sits. I think this property has great longterm potential.”

So when you’re thinking of that, it still has an element of I’m going to sit back, wait for it to grow and see where it takes me. Now, with alternate residential, the potential is actually quite exciting. So if you’re thinking of maybe a boarding deal or a rooming deal, this is a type of deal when you maybe go buy a four-bedroom home, start to do some renovations and make it compliant for renting out per room.

So you could very easily see your cashflow or your yield percentage move from about four to 6% in some residential deals or even in threes up to about eight to 16%. What that can do for your cashflows is very, very positive. So is this going to be the first two you add to the portfolio? Maybe not. But once you build that foundation of assets, this is when you might start to go into more complex or more cashflow driven or manufactured environments.

Now, when you go into another example, maybe subdivisions, this is when you’re trying to not wait for the market to do something. You’re trying to create of manufacture movements and price of value in that market. Now, if you’re thinking of moving in a portfolio or building a portfolio that takes you towards your goals of financial freedom or that freedom of choice or create some sort of passive environment, doing that just through buying a house, owning it, buying a house, owning it, unit or townhouse, this can take many things. And by many things I mean a long amount of time or a lot of debt paid down or not buying too much so you can just focus on these couple of assets to get debt-free.

Now, when you start moving into alternate residential, you can speed up the timeline quickly through either that manufactured passive income or manufactured equity and growth. Next time you’re doing your research, why not consider a bit of both? Alternate residential and what’s out there as well as your regular land, houses, unit, townhouses, to see when the right time might be right for you to fit that as part of your portfolio.

That’s it from us here at InvestorKit, the experts in wealth creation helping you take action.