How to Determine Which Type of Investment Property is Right for You - Article Banner

If you are considering investing in a Merced property, the chances are that you are a bit bewildered about the best type of property to invest in. The city has multiple assets, including single-family homes, condominiums, residential homes, townhouses, and commercial properties.

While you may find different assets profitable, how would you determine the best type of property to invest in? Knowing a bit about every type of property may help you decide. 

  • Single-Family Units

Investing in single-family unit properties can be essential in getting reliable tenants very quickly. However, one of the significant drawbacks of investing in such a unit is a bounded cash flow, considering that a single individual will pay the rent.

  • Apartments or Multi-Family Rentals

When you buy apartments, you are setting up a consistent cash flow. Even if a few apartments are vacant, the rent keeps flowing through the occupied apartments. The downside of investing in apartments in Merced is that you will have to take care of the maintenance of communal areas, repairs, face different tenants, and ensure peaceful and cordial relations between the tenants.

  • Condominiums

The most beneficial feature of condominiums is that they offer a high cash flow with lower maintenance. The availability of an HOA makes maintenance easier, cost-free and the monthly cash return is high. While the cash flow is great, the biggest task for a condominium owner is to maintain cordial relations with the neighbor to process the necessary exterior changes and repairs.

  • Other Types Of Residential Structures 

There could be different kinds of people or families looking for rental properties in Merced. Hence, owning duplex, triplex, or quadruplexes simultaneously is a great way of ensuring high cash flow. You can get these properties at a reasonable rate if you buy them at once, with a lower down payment. 

  • Commercial Property

The perks of owning a commercial property in Merced are that it ensures a steady cash flow, high equity, and greater appreciation value.

While the benefits are more, the highest risk is that of investment. The costs involved are extremely high, and the cash flow might not commence right after the purchase. The risks of inflation, credit risks, default risks, and liquidity risks are higher.

  • Vacation Rentals

Merced is known to be a calm and settling city. With Yosemite National Park not that far away a vacation rental could be another investment option. 

Factors to consider while buying an investment property

Considering the following crucial factors before investing in a property in Merced will help you make the right choice: 

  • The Location 
  • The 1% Rule
  • The Down Payment Gap
  • The Property Management
  • The Fix and Variable Costs
  • The Risks Involved 

How Can You Get The Most Out Of Your Investment?

Economical DecisionInvesting in property in Merced is an economically intelligent decision. However, you must make the right choice of property to make the most out of it. Make a decision based on your financial budget, secured down payments, knowledge of maintaining properties, landlord insurance, and the necessary legal permissions.

It is, therefore, advisable to consult a property management company with substantial experience, like River Drive Properties. 

River Drive Properties has been working in the Merced real estate business for over 26 years. We provide you all the data you need to help you make an informed decision about the best type of property to invest in. We can also assist you to advertise your Merced property strategically, find high-qualified tenants, and maintain your properties efficiently. For more details, contact River Drive Properties.