What Are The Different Types Of Real Estate?
by Arnab Dey Real Estate 11 April 2023
Investing in real estate is one of the best investment opportunities you can get. In a flourishing economy, you can expect your investment to revalue by every passing year, which means that you get thousands of dollars (or even more) in profit.
However, you need proper guidance when investing in real estate to avoid any pitfalls. Whether you want to sell or buy property, you need to get in touch with reliable real estate professionals such as the Coldwell Banker Reliable Real Estate NY to help with your house-buying or -selling process significantly.
In this article, we’ll discuss what real estate is and its different types to help you invest in the right real estate type.
What Exactly Is Real Estate?
Real estate consists of land that comes with elements attached to it, such as minerals, plants, and even immovable elements like structures.
Purchasing real estate allows people to invest their money, start their businesses, or have a place to live in. Since there are different kinds of real estate, an experienced real estate agent can help individuals invest in the one that suits their needs and preferences.
Types of Real Estate
No matter what kind of real estate you invest in, you can be sure that over time the value of your property will revalue. It is a great way to generate wealth passively. However, here are the 4 main types of real estate that you should be aware of.
The market for residential property is massive in the US, and it’s not surprising at all. With so many residential options to choose from, like single and multifamily houses, townhomes, villas, condos, and cooperatives, people actively look for residential properties to live in.
You can find a residential property by getting in touch with a reliable real estate agent or accessing online sites such as Realtor, Zillow, and Craigslist.
Due to the relatively low cost of entry, you can easily secure financing for residential properties. Some people like to invest in residential properties in the long run by putting them up for rent, while the property also revalues over time.
On the other hand, a short-term residential investment allows you to purchase and sell the property in a matter of months for a higher sales price, which investors keep repeating to generate massive profits.
Commercial property is the second most popular kind of real estate. The reason for this is that residence is a necessity, and everyone needs a house or apartment to live in. Whereas the requirement for commercial property is comparatively lower than for residential property.
Commercial property includes office spaces, movie theaters, grocery stores, retail spaces like fast food outlets, and leisure and hospitality properties.
Generally, commercial property isn’t publicly listed, but you can contact commercial real estate brokers to help you invest in one.
What’s great about commercial real estate is that you can have a steadier income through higher rent every month. However, this kind of real estate requires a bit higher down payment and more expenses to manage. The good thing is that crowdfunding and real estate investment trusts let you invest with lower down payments.
Land refers to raw land without any structures on it. This kind of undeveloped property gives you plenty of opportunities as to how you use the land. You can use it for future development or natural resources purposes.
Land includes farms and ranches, planned urban development, timberland, and recreational land for camping and hunting. It is the least expensive kind of real estate and is usually used for the long term.
The upside of investing in land is that the taxes and maintenance costs are pretty low compared to other types of real estate. In order to find appropriate land to invest in, you should talk to a local land broker.
Industrial property is quite distinct from the other types of real estate, as it’s mainly used for business purposes. Industrial real estate includes distribution centers, manufacturing facilities, refrigerated storage facilities, and food processing centers.
Capital investment in industrial property depends on the location and the purpose you’re buying it for. Generally, industrial properties are away from residential properties to make sure people aren’t affected by the chemicals or pollutants that are produced as a result of manufacturing.