5 Different Types of Real Estate Property You Can Invest In

Investing in real estate holdings provides numerous prospects for long-term capital growth. Many others, however, believe that these investments are a sensible choice for several other reasons.

Despite growing mortgage and housing costs, the real estate sector continues to grow steadily. It’s also worth noting that the demand for real estate properties has surpassed the existing supply, making it the ideal moment to begin investing. However, you must first grasp the variety of real estate investment options before you even start to take part in the market.

Every option has many benefits and drawbacks. Depending on their needs and objectives, these varied types of properties can benefit a multitude of investors.

Residential
When we talk about residential real estate, we mean any property that is utilised to house people. You’ll find them in the form of single-family homes as well as condominiums and co-ops where an investor or a renter resides. This is ideal for those who are eager to start a family or build their dream home.

In terms of returns, residential real estate is a great investment option. Pre-selling periods are commonplace in the real estate industry, where you can typically purchase properties at a discount. On these occasions, investors buy and then sell them when their market value rises.

Commercial
All properties with the primary purpose of hosting business activities and services are classified as commercial real estates (CRE), such as a warehouse or office building. Apartment complexes, shops, gas stations and hospitals are examples of these types of properties.

Usually, investors in this category are entrepreneurs looking to build their brand in a certain place or build a workspace for their staff. While sales and transactions contribute to cash flow generation, the majority of its returns come from the property’s rental profit.

Industrial
Industrial real estate encompasses the land, structures and other properties that support industrial-scale operations. These operations include the production, assembly, storage and distribution of products and goods.

Normally, zoning laws stipulate which sections of a city these real estate properties may be allocated to avoid disrupting residential areas and other neighbouring regions during their operations. However, the rate of return on this investment is determined by various factors, including the type of property selected.

Raw land
Raw land is frequently used to refer to untouched or agricultural land, including ranches, farms and timberlands. Numerous investors consider these properties as sound investments due to their physical and finite nature. Furthermore, these properties relieve you of the hassle of renovations and the anxiety associated with stolen or damaged property.

Compared to purchasing a residential or commercial property, undeveloped land might be a substantially less expensive investment that does not require property insurance. However, a significant disadvantage is that it can not produce revenue on its own.

REITs
The term “Real Estate Investment Trust” refers to a company that manages or owns commercial assets that generate revenue. These firms can be invested in through the use of a mutual fund or an exchange-traded fund.

REITs are one of the few investments that outperform the real estate market, which translates into higher returns on your investment. Additionally, there are other forms of REITs to pick from to optimise your portfolio’s leverage, like retail, offices, healthcare, housing and mortgages.

Final Thoughts
As the global population keeps growing, so does the demand for homes and other real estate properties. This highlights the importance of getting started on your property investments as soon as possible in order to secure the best discounts on your desired properties. In addition, they can support you in increasing your income, which is financially beneficial.

Bear in mind that whichever option you make will affect your financial decisions and your life in general. Most importantly, remember to enjoy yourself during your quest, take your time and let this guide help you! If you’re seeking a seasoned team of real estate agents that will become your property partners for the foreseeable future, contact Warwick Williams Real Estate. We can assist you in locating some of the most desirable real estate properties on the market in Drummoyne and the surrounding area.