Real estate is a thriving industry that many people join due to its investment opportunities and work flexibility. Despite the rapidly changing rates of mortgages and housing, the industry will always be in high demand. But a real estate professional must learn about real estate investing: the three types of real estate investments.
Real estate is an asset that can help build your empire. Unlike the stock market—which not many can predict—you’re in control of your investment.
However, that’s not to say that you shouldn’t analyze the real estate market; the time of purchase and resell is about perfect timing. If you invest in a property when the demand is high and sell at the wrong time, you could lose your investment. Remember that it takes time to see a return on profit.
Here are three investment properties you can invest in to be successful in the real estate industry.
Residential property is occupied by families or individuals who are using the property for living or dwelling. This may include single or multi-family homes, apartment complexes, townhomes, duplexes, and condos.
Many industry leaders recommend investing in residential property because you can earn income year-round, and everyone needs a place to live. Residential property will indeed be in demand for a long time.
In fact, unless an investor is purchasing residential properties to flip, it may be best for them to invest in multi-family homes in upscale neighborhoods due to the consistent cash flow.
Commercial property refers to a property that actively generates profit from a business or rental income. This can include businesses, casinos, hotels, industrial warehouses, and more.
Like residential property, commercial property can also help you see a return on your investment. However, with commercial properties, you may see more significant returns if you choose the right property.
Another benefit of investing in commercial property is that you have a larger selection of properties to choose from. In addition, constant maintenance doesn’t sit on your shoulders alone. If your tenant is running a business, they should maintain the property as well.
Raw land identifies a property in its natural state. The land is not being used for any particular purpose—neither living nor business. Many people tend to assume that investing in raw land is a waste of time and funding, but it may be quite the opposite.
Keep in mind that raw land may not produce a quick return on your investment because the purpose of raw land investment is to increase the property’s value. In many locations, raw land is challenging to come by for many investors; naturally, the value in the property is high.
Now that you understand real estate investing: the three types of real estate investments, you may be ready to invest right away. But before you do, be sure to understand your financing options; private real estate loans may provide an excellent opportunity to invest in property outside of working with a traditional bank.