Different Types of Real Estate Investments
Real estate is one of the greatest ways to build wealth, no secret there. Now there are hundreds of different ways to invest in real estate...maybe even thousands! I will share with you the four types of real estate: residential, commercial, industrial and land. Let’s get going:
Residential - Residential properties include: single-family homes, multi-family homes (2-4 apartments), mobile homes, townhouses, and condos. Each type can generate investment returns in different ways like, capital gains from a fix & flip, appreciation, rentals, and Airbnb to name a few. Residential real estate is a great way for new investors to get in the game! A great way to do this is called “house-hacking”. House hacking is where you buy a property, then rent out the other rooms or units to cover your expenses as the home owner! This genre of real estate is relatively well known and I’ll dive into more specific points in further posts.
Commercial – This is property used for retail purposes, office space, and apartment buildings containing 5 or more units. Investors buy these properties and rent them to business owners who need space to run their companies, buy and sell goods and services, and large apartment complexes. You’ll see these spaces all around the city or town you live in, you’re favorite restaurant, morning coffee stop, the local fashion store, that brewery on the corner and that new apartment complex your best friend just moved into. Commercial properties are a great way for investors to spread out their portfolio and offer favorable leasing options for the owner along with some great returns. Now commercial real estate can be more complicated and difficult to get into...but that’s why you’re here investing in your education!
Industrial - Industrial properties typically include buildings used by companies for the manufacturing, warehousing, and distribution of their product. Savvy real estate investors know that industrial space can generate some amazing returns with very few expenses. They often yield higher returns with longer leases, turnover rates are much lower, and favorable lease options where the tenant/company pays for a majority/all the monthly expenses. However, on the flip side, the building could sit vacant for a long while in between tenants due to the uniqueness of this real estate class. Now I would say industrial real estate investing is one step higher than commercial, with regards to difficulty entering the market and overall understanding of the investment. This is a great next step to take to get to that next level of real estate investing that you’re striving for!
Land - Buying land is a proven investment strategy that can produce healthy returns. Generally buying raw land won’t net you any passive income unless you get creative (leave a comment for creative uses of land below!!) Land in a popular location or spot that could be the site for future development can pay off handsomely in the future. There is generally less competition with vacant land as well, individuals don’t see the potential, can’t see possibilities of passive income, impatient, and land’s just “too boring.” All this can be more lucrative to a knowledgeable land investor!
Now this is a very quick, simple, and shallow over view of each category aiming to get the new investor’s feet wet or a quick re-fresher read to a seasoned investor. All this well I work on improving my skills and goals to become more active blogger! I’ll be looking to dive in deeper on these categories along with some other methods to invest in real estate soon! Please let me know what you think along with any constructive feedback, questions, etc and just reach out with a follow or connection here on BP!
Thanks for reading, great job continuing your education, and don’t forget to comment your thoughts!
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Still on the fence and dragging your feet about making a real estate investment?
Just try it.
Imagine the Wright brothers never attempted flight. Imagine Benjamin Franklin never tried to invent electricity. Imagine Columbus never set sail. The world would be a lot different right now.
They didn’t have it all figured out when they started, but it worked out pretty well. The same can be said for the efforts of Elon Musk, Bill Gates, Warren Buffett, Sam Zell, and many others.
Real estate is a proven investment. It’s benefits have been proven for thousands of years longer than the stock market or cryptocurrencies. 90% of millionaires have made their money in real estate. There aren’t any billionaires who don’t own any or a lot.
Whether you just want to improve your financial position now, grow your wealth, future proof your income, optimize your finances for fewer taxes, or secure passive income streams for when you can’t work, or ensure your family is provided for when you can’t be there, real estate stands out as the best solution.
You may never have mastered every one of the finer points of real estate and investing. There is a lot to know, and things are constantly changing. Yet, you’ll never get any of the benefits unless you try it. You can always improve and tweak as you go and make your next investment better than the last.
It’s virtually always the things we don’t try that we regret, not those we do. The best day to have gotten started may have been yesterday, but there won’t be another day as great to get going like today.
You can take the DIY approach and buy your own rentals or try to flip houses yourself. You can take little baby steps and de-risk it as you go. Or you can partner with experts who have mastered it already, and have teams of people to make sure everything runs well, and just get the benefits while they do all the hard work.
Learn from them as you go. Make on investment. Watch how it performs. Then improve or simply repeat.
Whether it is for wealth preservation or growth, the tax-saving benefits, passive income or the returns, real estate investing is hard to beat. There’s nothing that offers this level and balance of stability and upside potential.
Start with a small investment today if you don’t have any real estate in your portfolio. Or expand and try something new, or upgrade to apartment building investing if you haven’t tried it yet.
You are the only thing holding your finances back. You are the only one who can make the breakthrough by taking small and easy actions to change that.
Make a new investment today...