Investment Property
Four Major Types of Real Estate You Should Consider To Invest - General Real Estate
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Feb 12, 2006, 23:08

Once you have established your reasons and motivations for purchasing out-of-state real estate, once you have done your research and know where you want to go, then most of your job has already been completed. Now you must decide what kind of real estate or housing you wish to purchase. For the purpose of this discussion, I will break housing down into four major categories.

The first is general real estate which consists of single-family homes on public streets. This is probably the kind of real estate you are presently residing in.

First let's start our discussion by covering the pros and cons of general real estate. General real estate has proven historically
to be the best producer in terms of appreciation and the return on your investment. General real estate, as mentioned earlier, is probably the kind of real estate you presently own, and you might ask why not stay with the same form of real estate ownership, whether it be
permanent or part-time. With general real estate you will have privacy, and you will have a minimum amount of rules and regulations governing what you do with that property. Of course, the local government, through its zoning laws, will have some say as to what you do with your property. Generally speaking, however, what you do is going to fit within the broad parameters of it being residential. The laws are not too restrictive.

This type of housing may have CC and R's--covenants, conditions and restrictions--that are placed on the real estate that have to do with general issues as to whether you should be hooked-up to the city sewer, whether you can have structures with heights of certain limitations, or set-backs from the property lines. Except for these general guidelines, you are pretty much free to do what you want with your home. You can fence in your back yard, plant what you want, or put up a clothesline.

The down side of this is that your neighbor is just as free to do what he wishes with his property, and what he does may not be as complementary to the ambiance of the neighborhood and the real estate value of the property as you would like.

Another down side of general real estate is that it is the most expensive kind of real estate, both in terms of labor and/or money, to maintain. Somebody has to take care of the landscaping and mow the lawn. You have to water the grounds and pay for that water. Look into the cost of water in the area that you are purchasing--it can vary greatly from one area to another and can be a costly budget item. By the way, call the utility company for this information, don't ask the developer/builder, you won't always get an accurate answer.

If you are moving to a location for resort and/or retirement and would like to include such activities as swimming in a pool, playing tennis or taking a Jacuzzi, then these are all items that you must build or purchase with your home and maintain them or pay someone else to maintain them for you. If you do not have all the amenities that you want on your premises then you must get in your car and spend money on gasoline to drive to a location where they are available. You can then join a country club, or pay to use the private or municipal facilities of a tennis club, a health club or a golf course.

Then, of course, there is the issue of security. Particularly if you are not a full-time resident, you have to deal with the concern and the expense of having a security company monitor your home. Let's face it, you are never going to feel quite comfortable relying on a security operation to drive by your house every once in a while and do a cursory check as to whether everything is O.K., both in terms of whether your house has been violated by a break in or robbery, or if it is the victim of other more mundane but potentially more hazardous issues such as a burst water pipe, an extinguished gas pilot light, or a leak in the roof.