There is no denying that real estate is a lucrative business and anyone who has a significant amount of savings, wants to invest in this field. There are many advantages of investing in real estate and this is the reason many people look up to it as a reliable, safe, and profitable investment option. There are different types of real estate investment properties with each of them having their own peculiarities. To gain further understanding of these types, here is a detailed explanation of all of them:
Residential Real Estate Investments
Properties such as apartments, houses, townhouses, and vacation buildings come under this category as the person pays to live in this property. The length of the stay is based on the rental agreement which is signed beforehand between the landlord and the tenant. This ensures a continuous income with the value of the property being appraised according to market trends.
Commercial Real Estate Investments
This comprises of skyscrapers and office buildings. If you are able to construct a building, you can rent out or lease different floors or apartments to small businesses. They will use them as their office and will keep paying you in return. By renting out, you’ll be able to keep the property and get monthly income as well. Commercial real estate also involves multi-year leases which can generate stable cash flow and help the owner if the rental rates decline for any reason.
Industrial Real Estate Investments
This can consist of anything from industrial warehouses to storage units. Usually, there are long-term agreements involved and these units are leased to firms who use the facility to generate sales from customers. These real estate investments have a significant fee and service revenue streams involved and they help in increasing the return on investment for the owner.
Retail Real Estate Investments
The retail real estate investments comprise of shopping malls and other retail stores. You can rent out your shop to any brand or store and earn a significant rent in return. In some cases, the owner also gets a percentage of the sales generated by the store apart from the base rent. This serves as an incentive to keep the property in an excellent condition and not to look for another tenant/brand.
Mixed-Use Real Estate Investments
These are the type which combines any of the above-mentioned categories. An investor can build such a building which has retail shops on the ground floor and office flats on the top floors. This becomes a million dollar investment and generates multiple incomes from different sources. These are very popular amongst the investors because of their built-in diversification which helps in controlling risk.
These are the common types of real estate investment properties and one can profit to a great extent by relying on them. Real estate not only helps in building an asset but guarantees a significant return on your investment as well and this is the reason for its popularity amongst investors.
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