The Chicago real estate market is experiencing unprecedented change at the moment. Like in most metropolitan areas across the US, rents and house prices are on the rise. If you're lucky enough to be in a position to do so, now is a perfect time to become a real estate investor.

But there are many different types of real estate investments a person can make. So which type of investment property fits the best with your current financial situation and supports your plans for your financial future? 

That's what we're going to be discussing today. Read on for everything you need to know.

The Different Types of Investment Property

In order to be able to make an accurate assessment about which is the best investment property for you, you need to be fully informed about the pros and cons of each. 

The type of investment property the majority of people are most familiar with would be a rental property. Becoming a landlord will hopefully lead to a steady income stream of rent each month.

But even under the umbrella of rental properties, you still have different types. For example, you might choose to try a BRRRR investment strategy, which involves buying cheaper homes in need of some TLC and then fixing them up to make them more profitable in terms of the rental income they can generate.

Some of the advantages of becoming a landlord include a steady income and a decent ROI. The potential downfall would be the amount of work that goes into being a rental property owner. Though this can be remedied by employing the services of a property management company.

Then you have the option of investing in a real estate investment trust (or REIT). This is a good option for more hands-off investors who want to make a smaller initial investment. The potential negative here would be the fact that you wouldn't have as much sway in terms of decision-making.

Then there is house flipping. This involves buying an inexpensive property, adding value through renovations and redecorations, and then selling it for a profit. This wouldn't be suited to people who don't have the time or inclination to do a lot of work on a home.

Which One Is Best for You?

Each kind of investment property has its own benefits and drawbacks. Not every type will suit every investor, so it's necessary to look at your own specific situation to see which type is best for you. Ask yourself some of the following questions to help guide your decision.

How much money do you have available to you for your initial investment? How much oversight do you want to have and how much work are you willing to put in? How is the market behaving at the moment and what will it look like in six months, a year's time?

Your Guide to Buying an Investment Property

Buying an investment property is something that can be extremely lucrative—when it's a business decision that's executed well. Take your time before settling on the type of property that's right for you. If you are in need of any advice or assistance in this area, call a member of the GC Realty and Development team today.

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