Real estate properties come in all shapes and sizes, each with their own special features and unique structures. For the experienced real estate investor, the differences between them are integral to his money-making venture. For the beginning investor, however, these differences may not seem so important. For this investor, we discuss the three types of real estate properties you can invest in below.
Vacant Or Unoccupied Property
Vacant and unoccupied properties are typically found on the outskirts of town, in rural areas, and sometimes, in the city itself. Examples of these types of properties include farmland, orchards, timberlands, and ranches.
From a price standpoint, vacant and unoccupied lands are often more expensive than other types of real estate properties. They vary so greatly in size that it’s difficult to estimate a general price range. For an up-and-coming real estate investor, however, purchasing such a property is a great way to make a profit while gaining more contacts and experience.
Residential Properties
Residential properties are any that serve as homes to people. These properties include duplexes, apartment complexes, condominiums, and single-family homes. These examples vary greatly in structure and market value, which means many investors choose to deal with just one or two types, depending on location. Furthermore, many real estate investors prefer investing in residential properties over other types because there are always plenty of potential tenants waiting to rent their units.
Commercial Properties
Commercial properties are those where commerce and/or business takes place. However, they can also be sites where business and commerce are meant to take place such as empty lots, shopping malls, parking structures, etc. Industrial properties are often commercial properties, too, although it is less common. Investors looking to deal in commercial properties need to know the property’s history for generating a profit, as well as it’s potential to keep making a profit.
How Should You Handle Your Real Estate Investments?
Aside from deciding which type of property to invest in, you also need to figure out how you’ll handle the properties you buy. Renting out your properties is the fastest and easiest way to see a return on your investment. However, it also requires more of your time.
As a rental property owner, you have two options: manage the property yourself or pay someone to do it for you. The latter frees up your time but costs you more. Doing it yourself demands a great deal of your time, but if you don’t mind, it allows you to keep more of your profits.
Another way to invest in real estate is to buy, fix, and sell properties at a profit. Again, you can opt to do some or all of the work yourself to save money, but many investors hire contractors to complete repairs and renovations. This option requires a greater cost up front but requires less of a commitment over time.
Whichever type of property you decide to invest in, and how you decide to manage it is a personal preference, but ultimately, real estate investing is a great way to make the kind of money that allows you to do the things you want and to retire comfortably. Commercial properties, residential properties, and vacant land each offer good investment options for real estate investors.
