Any immovable property such as land, ponds, shrubs, buildings and fences encompass real estate. This property can be distinguished from personal property, which are movable items such as cars, collectibles, furniture and tools.
Over time, real estate has become a commodity for investors. Many individuals have found ways to profit off of buying real property. Real estate investor Richard Maize had acquired over 1,000 rental apartments by his late 20s, which shows how much the industry can offer to young entrepreneurs. Breaking down the five types of real estate can give a person a better understanding of the field.
Residential Real Estate
When a residential unit has less than five living spaces, it is considered residential real estate. Townhomes, single-family homes, condos and cooperatives are a few examples of residential real estate. Investing in this property can have several purposes. For one, a person might simply want to live in the unit. For people trying to make a profit, the unit can be rented out to others or flipped. Flipping can be risky due to renovations that the buyer may not have realized. It is important to understand every small undertaking that must be done to ensure a satisfactory return on investment.
Land can be a great investment for people who are looking for space to build on top of, but it is important to understand some of the ramifications. Investors often get more for their dollar when they buy a building than land, so a buyer should make sure that he or she has purposes other than investing. It helps to have a clear, drawn-out development plan before purchasing this form of real estate.
Industrial Real Estate
Industrial real estate is mostly suited for large-scale endeavors. Production, storage, research, manufacturing and distribution are the main purposes that this form of real estate is used for. Industrial facilities fuel the economy and can provide investors with great opportunities, as long as the investors choose wisely. It helps to ensure that commerce in the surrounding community is doing well. Industrial real estate is becoming a larger commodity with digital sales on the rise.
Commercial Real Estate
Commercial real estate is best for people who are looking to run a brick-and-mortar business. Restaurants, coffee shops, strip malls, department stores, hotels and gas stations are a few examples of this form or real estate. Leases often run significantly longer for commercial real estate than they do for residential contracts. While investing in this property may be great for businesses, it can be risky for novice investors since banks often ask for hefty down payments before lending.
Mixed-Use Real Estate
For investors who want as much flexibility as possible, mixed-use real estate may be the best option. A buyer can juggle commercial and residential real estate at once to figure out what works best at a given time. An example would be a rental unit built up top of a restaurant.
Investors have many options when looking at real estate. Before purchasing anything, it helps to concoct a plan and figure out what type of property suits the plan best.