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Four Types of Real Estate Investments You Need to Know

Two Stone Mountain Investors Discussing a Project in Front of a City SkylineIf you are just beginning to invest in Stone Mountain rental real estate, you may have observed that there are indeed quite a few options out there. Rental property investors, particularly, have many choices with regard to property type, size, and function. If you’re not certain which type of rental property is good for you, start by understanding the four main types of real estate and the purpose of each one. Thereafter narrow down your options until you identify the kind of rental real estate that fits your needs and goals.

Residential

Various new real estate investors taking into consideration a purchase prefer a residential rental property. Certainly, there may be a great reason for this: the residential real estate market is huge! In 2020, it was valued at $33.6 trillion and still developing. By definition, residential real estate is purchased and occupied as a dwelling by owners or tenants.

Within this broad category of real estate, there are a lot of different kinds of residential properties: townhomes, duplexes, multi-family buildings, single-family residences, and more. Thanks to lifestyle and renter demographic changes, single-family rental properties have been in high demand for years. This makes investing in single-family properties one of the best-known options for new investors.

Commercial

On the other hand, commercial real estate is property used only as a workspace or to conduct business or trade. As with residential properties, there are various different sorts of commercial properties. Office space, retailers, restaurants, hotels and resorts, and even healthcare facilities all fall under the classification of commercial real estate.

There are a lot of rewards of investing in commercial real estate, as it can be a very productive option for various investors. Nevertheless, the initial cost of a commercial property is possibly so much higher than a residential property, which can be a complicated obstacle for first-time investors to beat.

Industrial

Even though technically part of the commercial real estate category, industrial real estate is an ingenious classification of real estate often designated for use in very specific ways. Examples of industrial real estate comprise car manufacturers, storage and distribution centers, food processing centers, power plants, and research and development parks.

There are moreover three different classes of industrial real estate – A, B, and C – so it’s significant to do your research if you are seriously thinking of investing. Leases on industrial properties can be very profitable and tend to become very long-term holdings. And, similar to commercial real estate, it can be very costly to obtain industrial property, particularly if such properties are in great demand.

Land

The fourth and final type of investment property you should know about is a land investment. In most instances, raw or vacant land is purchased with the objective to develop it in different ways or to make use of the natural resources on or under the land for profit.

For various investors who own land, this would comprise granting leases that allow tenants to harvest minerals or water, oil or mining, timberland, orchards, or to use as farms, ranches, and recreational activities. Procuring raw land, specifically, is a big speculative investment that carries an equally high degree of risk. Nevertheless in the appropriate circumstances, leasing land can be a profitable undertaking for a real estate investor.

With so many different options ready, various real estate investors specialize and work on one type or sub-category of real estate. This can be specifically helpful when you are just beginning because it takes time to understand everything you need to perceive about investing in each type of real estate.

 

If you are ready and eager to start investing in residential rental properties, we can help! Our local Stone Mountain property management experts assist investors like you to help discover, prep, and lease quality residential rental homes. Contact us today to learn more.

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