25 November 2009

6 Basic Types of Real Estate Investments

The six types of real estate investments are residential, commercial, retail, industrial, trusts, and mixed-use.

Real estate investing is becoming a lucrative endeavor which involves purchasing, owning, renting, managing or selling of real estate properties. There are many benefits offered by real estate investments which make are appealing to many investors. For instance, investing in Tangier property can give you leverage if you decide or are able to sell the property at a better price. There are several types of real estate investments, and knowing them will help you decide on the investment option to pursue. Here are some of them:

Residential real estate investment

Some examples of this type of investment are houses, apartment complexes, vacation homes and townhouses. Families or an individual person can pay you rent to use and live in these properties. Rental or lease agreements can be made to specify the length of their stay.

Commercial real estate investment

Offices and work spaces fall under this type of real estate investment. Typically, this involves investing in the construction of a commercial building that will house several office spaces which can be leased out to companies and organizations and who rent to use of the property.

Retail real estate investments

Shopping malls and other retail venues belong to retail real estate investment. The landlord rents out spaces to businesses and retail enterprises. In addition to the fixed rent, there are some cases where the landlord is also given a percentage of the sales generated by the tenant of the rented space.

Industrial real estate investment

Industrial properties like factories, warehouses, storage units, garages and car washes fall are considered industrial real estate investments. This type of investment usually charges additional fees for the use of property facilities.

Real estate investment trusts

Real estate investment trusts, or REIT, involve selling securities like stocks in major exchanges and subsequently making an investment in real estate. A corporate entity that belongs to this type of real estate investment is granted a particular tax designation, which decreases or completely eliminates that company’s corporate income tax. In return, that company should distribute 90% of their income to its investors. In these cases, the distributed income may be subject to tax.

Mixed-use real estate investment

From the name itself, this type of real estate investment involves using a combination of the other types of real estate investments for a single investment project. For instance, an investor with large savings could choose to establish a small town equipped a variety of properties. These properties could then be leased out to interested tenants. There could be retail shops, office spaces, warehouses and apartment buildings in that same town. Because this type of real estate investment can be very expensive, it is a popular option for investors with a high financial capacity to invest. Additionally, the diversified nature of the mixed-use real estate investment helps control and reduce risks.

The different types of real estate investments give many opportunities to investors with a variety of needs and purposes. The important thing is to make the right real estate investment for you.

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