Real estate investment is one of the hottest topics among individuals. Most people believe that they know everything about the real estate industry and its investment tactics. In reality, they are not much aware of the real estate market. And this is where they need the help of real estate developers like Alistair Toma. Before you choose to invest in the real estate market, you must know its types.
Suppose you are planning to develop, acquire, or flip real estate, you first need to understand the actual picture of real estate investment and its several categories.
Types of Real Estate Investments are there:
Residential includes properties like houses, townhouses, apartment buildings, and vacation houses where an individual or family pays you to live in the property. The duration of their stay is based upon the lease agreement they sign with you. In most cases, residential leases are on a twelve-month basis in the United States.
Commercial properties include office buildings and skyscrapers. You can choose to construct a small building with individual offices using your savings. And lease them out to organizations and small entrepreneurs or sole proprietors, who would pay you rent to use the property. Needless to say, commercial real estate involves multi-year leases. This option can bring greater stability in cash flow, and even it offers protection to the owner when rental rates decline. However, in case the market heats up and rental rates rise considerably over a short period of time, it might become impossible to participate as the office building is protected into the old agreements.
The industrial warehouses that people give on lease to firms as distribution centers under long-term agreements cones under the industrial property. It also includes storage units, car washes, and other facilities that generate sales from customers who temporarily use it. In most cases Industrial real estate investments have particular fee and service revenue streams, which can include things like adding coin-operated vacuum cleaners used at a car wash, to increase the opportunity for the owner to earn a better return on investment.
Retail properties include strip malls, shopping malls, and other retail storefronts. In a few cases, the landlord gets a percentage of sales generated by the tenant store apart from a base rent to keep the property in high-standard condition.
You can also invest in real estate through some other ways in case you don’t want to actually deal with the properties yourself. For example, Real estate investment trusts, or REITs, are the two most popular options in the investment community. If you choose to invest through an REIT, you are basically buying shares of a company that owns real estate properties and distributes practically all of its income as dividends.
So, these are the few types of real estate investment. In case still you have some doubts or queries, it is better to approach an expert real estate developer like Alistair Toma before making any final decision. In the end, half knowledge is worse than anything.