This week, I was told that if you put your cups in the cabinet right side up, you were crazy; well, I was actually told that you would be a risk-taker.
In real estate, investors are risk-takers. People who prefer to play it safe rarely invest in real estate. They would rather earn less on their money if consistent and guaranteed than take a chance to make much more on their investment.
Here are some examples of ways to invest in real estate:
STR (short-term rental – high risk) – STR is a property leased for one to fourteen nights. The property is fully furnished and stocked with everything necessary to live there, such as plates & cups, blankets & pillows, and everything in between. Owners can charge a premium
Owner/Broker of RAM Properties, Stacey Levin
price per night based on the amenities provided and the tourist attractions close by. Think about it: you pay an average of $100+ for a basic hotel room that may have shared amenities, one room for the whole family to share, and one bathroom that is also shared. For the same price or slightly more, you could have an entire house that someone has stocked with all necessities and experience a much “homier” atmosphere. STRs are generally used for recreational purposes, like vacations and staycations. Maintenance costs could become high, based on who and why the guest stays in your STR. Here are a few risks that could be a hindrance for some people: The city and/or parish could change the laws making your property ineligible for STR, or weather conditions and/or Acts of God could put a damper on your rentability on an already season-based business.
MTR (mid-term rental – high to moderate risk) – MTR is a property that is leased from 30 days to six months. The property is fully furnished and stocked, just like a STR. Owners can still charge a monthly premium price, because the property is furnished, and maintenance and utilities are included. Owners should provide some discount for longer, consistent nightly rentals because of the savings on cleaning fees and the avoidance of un-booked nights. MTRs are normally used by those on extended business trips, renovating or building a home, or caring for an ill loved one. The risks include a lack of steady bookings and utility and maintenance expenses owed when no one is renting.
LTR (long-term rental – lower risk) – LTR is the standard investment property that most people think of. This property is leased for six months to one year with renewal options. The property is furnished only with appliances; utilities and maintenance are usually the tenant’s responsibility. Owners can only charge what the market determines is the standard monthly rate. The risk of LTR is people’s changing circumstances over time, some good and some bad. They could be the best tenants for the first few months before you allow them to reside there for free, due to your emotional connection with them and their reasons why. Then, it takes you 30 or more days to legally remove them.
I am sure you know this by now: my cups are rightside up in my cabinet. I am one of those crazy people. My husband and I have extensive experience in all three types of residential rental investments. We own two STRs in Branson, MO, two MTRs close by in Springfield, LA, and four LTRs in the Hammond area. We are considering selling all our local properties to buy one or two more STRs in Branson, MO, because they provide the largest return. If you have ever considered investing this way, please let me buy you a coffee. I love sharing our story and encouraging others to put their cups in the cabinet THE RIGHT WAY. admin@ramproperties. net Stacey 504.352.9729 Russell 985.788.2687