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The Different Types of Real Estate Investments You Can Make

Are you interested in real estate investments but don’t know where to start? Look no more for here is a list of investment types you can make. Each investment type has an example with pros to help you decide on the best investment to choose.

1. Mixed-use

A mixed-use investment is a combination of various investments you can find below. A good example of it is buying land in a commercial area and building a multi-story building on it with other projects around. 

You can have the ground floor rented out as commercial space, the second level as a dorm, top floor as your own home, and the surrounding area as spaces for small retail businesses to rent on.

One advantage of this investment type is you have a steady flow of rental income because you have multiple projects in a large portion of land.

2. Retail

Retail real estate investment is owning land and portioning them into small boutiques and stalls for rent. Strip malls, retail storefronts, shopping malls, and flea markets are examples of these. This investment is good because you’re earning money in percentage from the tenant store’s sales plus a base rent.

3. Industrial

Warehouses and storage spaces for rent are prime examples of industrial real estate investment. They are similar to some retail real estate investments in terms of building styles and property size. 

But industrial property investments don’t take a percentage of sales the tenants make. Instead, they make more profit from service revenue streams such as trucking and security

4. Residential

Residential property investment doesn’t have only two to three strategies. You have so many to choose from that would fit every type of budget. The best part of residential real estate is that the properties come in many house and land sizes.

You can buy-and-sell a property or have it out for rent. You can also live in your property while accepting tenants to occupy rooms or the garage. The best part of it all? Residential properties are affordable compared to the investments above that require a huge amount of funding.

5. Commercial

The most common type of commercial property are skyscrapers or tall buildings in general. This is where an investor finds land in a highly-commercialized area and builds a multi-story building for different companies and businesses to rent on.

6. Raw Land & New Construction

This investment represents two types of two other real estate investment subcategories. One is raw land where you buy land without building something on it. You can either wait for the land resale value to go up before selling it again or go for the second, which is constructing a home or commercial building from scratch.

7. Real Estate Investment Trusts (REITs)

REITs are companies in the stock exchange of properties. A company may own multiple commercial properties such as hotels, casinos, restaurants, or malls. As an investor, you have to buy a portion of these shares just as you would in the stock exchange.

The good thing about this investment is you’re building your real estate portfolio without the need to actually own a property. And every year, you get to receive dividends as REITs are required to return 90% of their taxable income to shareholders.

Investing in real estate isn’t just about buying and selling homes. Some investments involve renting out mid-sized buildings to large-scale lands. There are times where you don’t even need to build anything. Just acquire it and wait for its value to go up before selling it for profit. But before anything else, choose an investment that fits your budget.

Good real estate investors learn first about the business before putting their money out. Be a part of this smart group by reading these blogs: