Real Estate includes land and the buildings on it, plus natural resources like growing
crops, minerals or water. It’s immovable property and different from personal
property, which can be moved.
Direct investments can include purchasing properties and renting or selling them.
Another option is investing in a REIT, which gives you broad exposure to the market.
Residential
Residential real estate is any property that can be used as a home, such as single family
homes, townhouses and condominiums. It’s one of the two general categories
of real estate, along with commercial.
Residential landlords have more flexibility than their commercial counterparts in
choosing tenants. But, they may also face more tenant turnover and a tougher time
finding vetted renters. Because of this, many investors choose to focus on
multifamily rental properties, where they can often find tenants who are willing to
sign long-term leases.
Residential real estate transactions are typically simpler than commercial ones, and
there are plenty of financing options available for them. That includes conventional
loans, loan programs backed by Fannie Mae and Freddie Mac, and government backed
mortgages. They’re also usually cheaper than commercial properties to
purchase, making them a good entry point for new investors.
Commercial
Investing in commercial real estate (CRE) is more complex than residential property
investing, and it has a much higher ROI potential. Whether you’re interested in
building your own commercial space from the ground up (also known as
development) or purchasing and operating existing assets, there are many
opportunities for individual investors. Read more https://www.sellmyhousecompany.com/we-buy-houses-snohomish-wa/
Commercial properties are leased to businesses instead of families and individuals,
and they’re subject to a broader range of laws and regulations. These include
zoning, building codes and permits.
CRE investments typically have a longer hold period than residential real estate, and
they can potentially pay out in two ways—via regular cash distributions or a share of
the final sale price. Because of this, it’s often a smarter choice for experienced
investors looking to scale their portfolios. However, CrowdStreet does not offer tax
or legal advice, so please consult with qualified professionals before making any
investment decisions.
Industrial
Industrial real estate is one of the hottest commercial property subtypes and is
expected to generate tremendous returns on investment over both the long- and
short-term horizons. The sector includes manufacturing, warehousing and
distribution, “flex” space that can include office and retail uses, warehouses (large
and small), logistics facilities, showrooms and self-storage.
Consumption and trade are the primary drivers of demand for industrial real estate.
As a result, new businesses tend to choose larger industrial properties and
established businesses often want to upgrade to more operationally efficient
locations with better parking, more trucking maneuverability and lower operating
costs.
Tenants in industrial buildings are typically more willing to stay put than those in
apartments, making it less likely you’ll find yourself in a “flip” situation where you
have to invest heavily into renovating the building to attract a new tenant. And for
those not ready to buy an entire building, investing in industrial REITs that own
multiple industrial properties may be a viable option.
Land
Buying land real estate can be a profitable investment strategy for investors who
want to invest in properties without worrying about tenant management,
maintenance and other property ownership issues. However, it is important to
understand the difference between land and real estate before making any
purchase.
In legal terms, land is the Earth’s surface and everything below it down to the center
of the planet and upward to space, plus anything permanently attached to it,
whether natural or artificial. Real estate is land plus the bundle of rights that come
with owning it, including the right to possess, sell and lease it.
Real estate developers acquire land and then build houses, commercial buildings
and other structures on it to earn a profit. They may also use a method called parcel
flipping, where they contract to buy undivided land and then turn around and sell it
to another investor. This requires extensive research and a keen eye for market
opportunities.