Real estate is one of the best investments anyone can make. It will allow you to earn a passive income after the initial investment. Real estate can also contribute to your total assets, adding to your personal wealth.
But getting into real estate isn't always simple. It can be overwhelming trying to understand what your first steps should be to enter the industry. Before getting into real estate investing, you should know what properties are available to you.
Understanding the different types of investment properties will help you make an informed decision. It depends on how hands-on or laid back you want your real estate business to be and how much money you want to put into the investment.
Here are three types of property that make good investments.
Residential Real Estate
Investing in residential real estate is a great stepping stone into the industry. You will have plenty of options for making money and seeing a high return on your investment with residential properties.
You can flip houses to sell, rent out a vacation property, or lease out long-term rentals. If you want to take it a step further, you can own multi-family dwellings like condos or apartment buildings.
These can be easy to acquire but often expensive to invest in. But you can make a lot of your money back if you have the right strategy and team behind you.
Commercial Real Estate
Commercial refers to properties that are non-residential; typically, businesses like hotels, offices, or retail stores occupy commercial buildings. Commercial real estate is considered active because, as an investor, you're both owning and renting out the space.
You can earn money by collecting rent from the business that leases the property. These kinds of properties tend to have a higher return on investment than residential.
However, maintaining and managing a commercial space can be more time-consuming. Because commercial investments are public-facing, there is also some risk involved. You must keep the property up to standards to avoid injuries and repair any damage that may happen to the property.
Land Real Estate
Raw land refers to a property that has nothing built on it. This land is undeveloped, which makes it cheaper and easier to acquire than most other real estate investments.
Land also appreciates in value over the years, so you'll always have a return on your investment. When you buy raw land, you can develop it in a way you see fit.
You can build residential or commercial buildings on the land and continue to make money in that way. You can also rent the land for agricultural purposes and allow farmers to grow crops. You have many more options with raw land than most other properties.
What Type of Real Estate Investing Is Good for You?
Getting into real estate can be a very lucrative investment. With different types of investments, there are pros and cons and different levels of gains. But if you have the right information and go in with a strategy, real estate provides a high return on your investment.
Now knowing these three basic types of property to invest in, you can make an informed decision on which is right for your business. Whether just beginning real estate investing or a seasoned pro, it's always good to have information.
Interested in property management services for your real estate investment? Contact Allegiant Management Group for more information about our services.