TYPES OF REAL ESTATE INVESTMENTS TO INVEST YOUR MONEY. .

 There are several types of real estate investments, but most fall into two categories: Physical real estate investments like land, residential and commercial properties, and other modes of investing that don’t require owning physical property, such as REITs and Crowd Funding. 

If you’re looking to invest in real estate, here are five types to consider:

1. REITs - (Real  Estate Investment Trusts).

2. Residential Real Estate

3. Commercial Real Estate

4.Raw Land

5. CrowdFunding.

1) REITs.

A real estate investment trust (REIT) is a company that owns, operates, or finances income-generating real estate. Modeled after mutual funds, REITs pool the capital of numerous investors. This makes it possible for individual investors to earn dividends from real estate investments—without having to buy, manage, or finance any properties themselves.

REITs are required to return at least 90% of their taxable income to shareholders every year. This means investors can receive attractive dividends in addition to diversifying their portfolios with real estate. Publicly traded REITs also offer more liquidity than other real estate investments: If you find yourself suddenly needing some cash, you can sell your shares on the stock exchange. 

2) RESIDENTIAL REAL ESTATE.

There are numerous rental property types in residential real estate, though the most common is thought to be single-family homes. Other residential properties include duplexes, multifamily properties, and vacation homes. Residential real estate is ideal for many investors because it can be easier to turn profits consistently. Of course, there are many residential real estate investing strategies to deploy and different levels of competition across markets — what may be right for one investor may not be best for the next. For this reason, choosing the right exit strategy and market is key when it comes to residential real estate.

The most common exit strategies used in residential real estate include wholesaling, rehabbing, and buy and hold properties, which can be used to generate rental income. Investors should be careful to consider which strategies would work best in their market area by conducting a thorough market analysis.

When managed correctly, a residential real estate investment can yield attractive profits. This is because, in addition to earning steady cash flow, residential real estate benefits from a number of tax breaks.

3) COMMERCIAL REAL ESTATE.

Commercial real estate is a space that is rented or leased by a business. An office building rented by a single business, a gas station, a strip mall with several unique businesses and leased restaurants are all examples of commercial real estate. Unless the business owns the property itself, each business would pay rent to the property owner.

Industrial and retail real estate can fall under the commercial umbrella. Industrial real estate generally refers to properties where products are made or housed rather than sold, like warehouses and factories. Retail space is where a customer can buy a product or service, like a clothing store. Commercial properties tend to have longer leases and can command more rent than residential properties, which may mean greater and steadier long-term income for a property owner. But they may also require higher down payments and property management expenses.

4) RAW LAND INVESTING & NEW CONSTRUCTIONS.

Raw land investing and new construction represent two different types of real estate investments that can diversify an investor’s portfolio. Raw land refers to any vacant land available for purchase and is most attractive in markets with high projected growth. New construction is not much different; however, properties have already been built on the land. Investing in new construction is also popular in rapidly growing markets.

While many investors may be unfamiliar with raw land and new construction investing, these investment types can represent attractive profits for investors. Whether you are interested in developing a property from start to finish or profiting from a long-term buy and hold, raw land and new construction provide a unique opportunity to real estate investors.

Investors should be prepared to complete extensive market research to maximize profits when investing in raw land and new construction. This will ensure you choose a desirable area and prevent the investment from being hampered by market G.

5) CROWD FUNDING.

Crowdfunding platforms offer investors access to several assets that offer high returns and are traditionally reserved for the wealthy. While this offers the ease of finding assets to investors, this type of real estate investment also introduces a high amount of risk. Crowdfunding platforms are typically limited to accredited investors or those with a high net worth. Some sites offer access to non-accredited investors as well.

WHICH REAL ESTATE INVESTMENT IS GOOD FOR YOU? 

If you’re considering investing in traditional real estate — like residential or commercial properties — doing your due diligence doesn’t just mean coming up with a down payment. Knowing your local market is important. If there isn’t much demand for homes or commercial space in your area, or property values start dipping, that investment could quickly turn into a burden.

If you’d prefer to be more hands-off with your investments, REITs and crowdfunding platforms are easier ways to add real estate to your portfolio without owning physical property.

Thanks for reading.