3 Investment Tips for Small Business Owners

When you're looking for investments, you might think that many options are out of your reach. The truth is though that you don't need to have a large and diverse portfolio to start investing in your small business.  Many small business owners find that real estate opportunities are a safe place to invest.

1.    Emerging Neighborhoods are Great Opportunities

Most small businesses try to stay away from rental properties because there seem to be 2 primary paths. The first path is that you spend a lot of money to buy a rental in a great area and charge outrageous rent. But, that path doesn't have a high return on investment. The second path is that you will get dirt cheap property because it's in a crime-ridden area where you won't be able to charge much, and you'll be repairing the home every few months between flighty tenants.

Instead, invest in emerging neighborhoods. The ideal neighborhood should have schools nearby and have a decreasing crime rate. You might notice that these neighborhoods are just outside the price range for housing assistance programs. Forbes has advice on how to find the emerging neighborhoods in your area.

2.    Buy Property That Doesn’t Need A Lot of Attention

There are small businesses that invest in flipping houses. But, this method of investment is a very high risk. Small businesses that are just starting to invest might look at homes that they can moderately upgrade, and then rent out or sell.

Homes that don't need extensive care gives the small business owners the opportunity to find renters or put the house on the market immediately. But, the pitfall that many small business owners fall into with this type of investing is that they over-rehab the house.

Not every upgrade or repair will have an impact on your return or rental prices. Rehab homes cautiously and buy houses that don’t need a lot of repairs.

3.    Multi-Family Real Estate Investing Options

Although it might seem like a good bet to stick with buying single-family homes and only dealing with one person, it is usually a safer investment to purchase multifamily properties. The advantage with multifamily real estate is that you are less likely to have the property entirely vacant for an extended length of time.

What’s even better is that the multifamily mortgage loan requirements are not exceptionally restrictive. Many small business use multifamily properties as a starting point in their investment plan.