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Understanding Different Types of Real Estate Investments

Understanding Different Types of Real Estate Investments

When investing in real estate, there are a number of options and choices. Many people simply think of residential real estate and offering it as a long-term or vacation rental, however, there are a number of other types of real estate you can invest in. Let’s take a look.

 

Residential

Houses, apartments, condos, townhomes and even entire apartment buildings fall into this category. Typically, these units are rented out via long-term rental or in some cases, vacation rentals. The average long-term rental lease for these types of properties (not including vacation rentals) is 12 months long and renewable yearly.

 

Commercial

Office buildings or other buildings with multiple tenants in separate units used for business purposes. These properties often involve multi-year leases, which can be good for the investor as a steady and predictable stream of income. However, if rental prices in the area increase, this keeps the owner locked into a lower rate until the lease is up for renewal.

 

Retail

Commercial property specifically intended for storefronts. These properties can include shopping malls, strip malls or even multi-unit smaller buildings with storefronts available. Again, retail property is often leased in multi-year agreements, which can be both a positive and a negative for the investor/owner.

 

Industrial

These types of properties range from industrial warehouses/distribution centers to storage facilities to car washes and other purposes that generate sales from customers who use the facility on a short-term basis or buy items housed there on a short-term basis.

 

Mixed Use

Mixed use property is the combination of any two or more categories above into one project or property. For example, a strip mall with storefronts on the street level and residential lofts on the second floor above the stores would be one example. Mixed use properties are popular with investors because they help minimize financial risk by allowing the space to be used in multiple ways.

If you are interested in investing in real estate, don’t limit your possibilities just to residential rental and vacation rental properties. There are a number of different types of real estate you can invest in that will provide a good return. Talk to your Century 21 Broadhurst agent about all of your real estate investment options.

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