Choosing What Type of Real Estate to Invest In

What Type of Real Estate is the Best for You?

Real estate is a wonderful investment. Many people find that it’s the best place to put their money. It’s reasonably safe and consistent, and it has a relatively high rate of return. It does, however, have its own complexities. There are several types of real estate that you can invest in, and what’s ideal for someone else might not be so great for you. If you’re thinking about investing in real estate, here are a few different ideas to consider.

Land

Empty land is relatively simple. It’s just a plot of dirt, and perhaps a few trees. There is generally very little you can do with land, but it tends to be inexpensive compared to most forms of real estate. Although you may not instantly start making a profit off of a land plot, it should appreciate over time, leaving you with more money than you started with, even if you sell it the same way you bought it. Plain land is good for anyone with low starting capital, or anyone who is simply interested in investing, and doesn’t want to put very much energy into managing a property.

Residential

A residential property generally has one or more houses or apartment complexes on it. The owner or any number of renters can live on this residential property. Residential property tends to be much more expensive than empty land, because in addition to the dirt, you’re also paying for the building(s) on the property. On the plus side, much more can be gained through residential ownership. If you don’t yet have a place to live, you can live here, or better yet, if you do have a place, or you purchase multiple units such as an apartment complex, you can rent the space to others who are looking for a home. The rent you collect should at least pay for the expenses of the property plus a little more, and hopefully will pay for most if not all of the mortgage payments. The best part is that once you decide to sell, depending on a number of factors such as timing and flexibility, you’re likely to earn more than what you paid for it, due to appreciation, on top of what you collected in rent. This is a great investment for people who can afford it and don’t mind putting in a little extra work.

Commercial

Commercial properties are similar to residential properties. They tend to be a little bigger and are a little more expensive in what they cost, what they rent for, and what they sell for. One of the main differences is that commercial property rental tends to be longer term than residential property. Businesses don’t tend to move very often, and therefore, usually sign multi-year leases, instead of one year renter’s contracts. This type of property is best for someone who can afford both the money and the time to see a lease through.

Interested in owning one of these types of real estate? Now you know the basics, but there’s a lot more to it that can’t be explained in a blog post. Contact us, we’ll help you out with whatever you’re looking for.