Real estate is among the most profitable sectors in the investment options. Most of the new investors have the idea of how good a real estate investment can be, but they do not know the subtypes of real estate that can also make major changes in their profits. Here you will learn about the real estate investments that can provide you a better experience in investments while also choosing a theme and resource that interests you. Here are the five real estate investment types you should know about.
The most common real estate investment option for investors is residential properties. It includes houses, apartments, townhouses, vacation houses, and rent houses where you get paid by the tenant. The tenant’s duration is based on their agreement, after which the property again belongs to you. It can be a rental agreement or a lease agreement. Residential real estate is the fastest growing market today as more people are being independent of owning their own house rather than renting it. Urbanization also plays a major role in the increase in demand for residential properties in the cities.
Commercial real estate properties include office buildings, skyscrapers, and multistory shopping facilities. Many investors choose to build office buildings in their property to give it for rent or lease to companies. Usually, the companies that look for new offices take a long-term lease, which can provide great cash flow stability. When the market fluctuates, the rental rates can go up and down for a short period.
The industrial properties consist of warehouses, storage units, factory hangars, and facilities like cash washes. The purpose of such properties is to generate quick sales from the companies that take them for rent. The industrial property owners can also have additional fees and service revenue under the agreement. While the owners cannot demand a share from the profits that the company renting the place is making, it also becomes beneficial for the tenants to reduce the cost of staying with a distributed share from the profits.
Retail stores are also a profitable real estate investment opportunity for investors. The shopping malls, retail storefronts, and shops offer a small percentage of the generated sales to the owner. Also, the owner may also expect tenants to maintain the property in top-notch condition and pay for its maintenance themselves.
Mixed-use properties are meant for multi-purpose. These are the properties that have the capability of hosting two or more types of properties that are mentioned above. A three-story building can have a store on the ground, an office on the first floor, and apartments on the third floor. Mixed-use real estate can diversify a region while controlling the risk of not finding any tenants.