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5 Common Types of Real Estate Investments

There are different types of investments of real estate. It caters a number of requirements from potential home owners and businesses.

The properties may be residential, commercial, industrial, retail or mixed use. These different real estate types are commonly seen in today’s areas. It is important to know the differences among them to know your potential gains and risks should you decide to invest on one.

Types of real estate investments

1. Residential

Residential properties are investments under real estate which include apartment buildings, houses and condos. The occupants such as the home owners and families pay the management to start living in residential properties. Condos, specifically, are a great starting investment should you need a space within your preferred location. Say for example, condo for sale Los Angeles is a great place to start your search for real estate investment in condos in a city like Los Angeles. If you want to buy a condo in a more specific location in Los Angeles like Santa Monica, you should see Santa Monica condo for sale.

The period of staying depends on the agreement during acquisition or rental. There are leases which can be completed as short as months or as long as years. The length of the owner’s stay depends on their choice and the agreement between the lessor and lessee.

2. Commercial

This type of investment under real estate consists if skyscrapers and office buildings. Should you decide to start constructing a building, whether it is a small or large one, you can lease them to business owners and companies.

Most commercial properties are leased for multiple years. This provides stability in terms of cash flow. Moreover, the owner is protected even when the rental rates begin to decline. Nevertheless, there are still periods when rental rates shoot up and building owners enjoy financial advantages of owning a commercial property.

Shopping mall as a retail property investment

3. Retail

Investments for retail properties include step malls, shopping buildings and store fronts. Most of the time, the property owner receives a percentage or part of the sales by the store tenant.

In addition to these, the owner also earns from the base rent paid by the tenant. These funds shall be used to maintain the condition of the property. It is a must to keep the property in great shape.

4. Industrial

Industrial properties are known as usual investment type for those who want to focus on real estate. In general, it needs fewer amounts of average investments. Moreover, it is less intensive on management, making it operate at lower costs than commercial properties.

There are several types of properties under industrial. The type depends on the building’s features. Some buildings may be utilizes for research, manufacturing, distribution and even warehousing. There are some which has a partial space for office.

5. Mixed-Use

Real estate for mixed-use purposes refers to properties that combine the types provided above. There are several properties that provide spaces for retail and commercial in the same area.

This type of property is popular for investors with assets that are significant in nature. It offers a feeling of diversification as you can use several spaces for different purposes. Furthermore, the risk is generally controlled as you can manage the spaces according to demand.

Apartment building exterior

Conclusion

These are the common real estate property types in the market. One is highly distinguishable among the others. Nevertheless, there is a mixed-use property that combines the features of two or more types. It is recommended to consider their feature to identify the benefits of investing on them.

About author

Ivan Widjaya
Ivan Widjaya 3216 posts

Ivan Widjaya is the Owner/Editor of Noobpreneur.com, as well as several other blogs. He is a business blogger, web publisher and content marketer for SMEs.

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