The key to investing in real estate is determining what type of real estate investment will be right for you. There are various types of real estate investments each has its benefits and rate of return. To help you decide which type will suit you read this article. We have outlined different types currently available to real estate investors.
1. Commercial Real Estate
Commercial real estate is used for business purposes. Some of the examples of commercial real estate include,
Restaurants, gas stations, grocery stores, office space, strip malls, and even hospitals. Investors mostly invest in commercial real estate because it will run 1 to 10 years when compared to residential contracts.
Types of rental in commercial real estate
1) Single-Net Lease,
2) Double-Net (NN) Lease,
3) Triple-Net (NNN) Lease, and
4) Gross Lease
For first-time investors, most banks require a 20% down minimum for a 10-year loan so if you want to invest in commercial real estate be sure to have experts on your side. An experienced realtor will be specialized in commercial real estate so you can find the property that will give you the best ROI.
2. Residential Real Estate
Residential real estate is a single or multifamily dwelling that has less than five individual dwelling spaces. Most people buy residential real estate for three reasons,
To live in themselves
To fix up and sell
To rent the home
The type of loan you get for residential buildings will differ depending on your plan and zoning. There are responsibilities that come with being a landlord, residential properties generate passive income and grow your investment portfolio.
Turn your property into a rental and generate cash flow through rent payments, security deposits, move-in fees, etc.
3. Raw Land
The benefit of purchasing raw land is being able to determine whether you want or not want the space to become residential or commercial property. You’ll have complete control over the property on how it looks, the finishes, and overall architecture. But you must do market research, a large amount of capital to invest, and a realtor to complete the process.
4. Industrial Real Estate
If any building is used for manufacturing, production, research and development, storage, and distribution facilities then it’s industrial real estate. They are the lifeblood of the economy, and the best investment if you can pick a good one. The consumption of goods decides the growth of industrial real estate which means if the economy is in good condition and the people are buying things then industrial real estate will be at its peak. As it continues to grow, the companies will look more for industrial real estate to store their product.
5. Crowdfunding Platforms
It allows investors to access real estate investments with high returns and significant risks. The major benefit of crowdfunding platforms allows to access investment opportunities as a nonaccredited investor. This type will be an option for people who don’t meet the financial criteria.