Investing in real estate is one of many wise decisions that can be made. However, when getting into real estate investment, it’s essential to know the basics. Such as the four types of real estate.
Knowing the four types of real estate and what they have to offer investors will help create a personalized investment strategy. Read on to learn about these four real estate types and how they differ.
Residential
The first type of real estate is known as residential. This is one of the biggest real estate markets out there, and there are even more options within this subsect. Residential real estate applies to single-family homes, multi-family homes, mobile homes, townhouses, condos, duplexes and triplexes, and cooperatives.
According to World Property Journal, the value of the housing market is somewhere around $33.6 trillion. So it is safe to say that investing in residential properties is a wise investment.
It’s worth noting that each type of residential property requires a different investment tactic. For example, the way one invests in a house will be different from handling a townhouse or duplex.
Commercial
Commercial real estate is the next type and is most commonly pictured as a large shopping mall or center. However, commercial real estate goes much farther than that. Commercial properties include office space, medical centers, parking lots and garages, movie theaters, grocery stores, restaurants, and countless other alternatives.
Real estate investments tend to be both more complex and more expensive so that they will take more care and planning. This is partially due to the specialization required for most commercial lots.
Industrial
Next up are industrial properties. These are properties used by warehouses, manufacturers, and distributors. However, that is far from being a complete list, and more alternatives can be found through research.
In many ways, industrial properties are similar to commercial properties. While they are still counted as a distinct type, it’s easy to spot the similarities. They are more specialized, complex, and expensive. Industrial properties require more planning but do have an excellent financial turnaround.
Land
The final property type is land. That is to say, land that is untouched or otherwise not already developed. There are a few reasons for investors to choose this option. Land can be bought with the intent to build. Or it might be purchased under the belief that it has resources within (oil, water, wood, etc.).
Just because the land is lacking a building doesn’t mean that it is merely an empty lot. Land purchases include orchards, timberland, farms, ranches, urban development areas, and recreational parcels.