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Real Estate Investment Categories

Leasing a property, after all, is a great way to add to your income and increase your assets; perhaps, a good form of wealth management for sure. Whether or not real investors consider using LLC, — a legal structure that protects you from certain losses that may otherwise happen in real estate investments — they would be investing in any one of these categories.

Multi-Family Residential Investment

Investing in residential real estate means acquiring properties such as apartment buildings, houses, vacation houses, townhouses and more, where a person or family pays rent for using your property. Leasing involves formulating a lease or rental agreement, which determines your tenant’s duration in the property. In comparison to other real estate investments, this is the most stable, as people always need a house to live in.

Commercial Investment

When people invest in commercial real estate, they mostly purchase office buildings. You might have seen many people constructing small buildings that have multiple offices. These properties are, usually, leased out to companies and other small business owners who pay rent just the way a tenant pays for rent for using a residential property. Owing to high operating costs involved, though, losing a tenant may substantially impact your ROI when investing in commercial real estate. Still, this category remains the choice of many real estate investors these days, as such properties are, usually, in downtown areas and generate good revenues.

Retail Investment

All the big shopping plazas, complexes, malls and retail front stores that you see around are examples of retail estate properties. The only difference is that these properties are used not for people, but for commodities and other services. In many cases, investing in a retail real estate also gives you the opportunity to receive a percentage of sales other than the rent your tenant pays you every month. Prominent supermarkets such as Wal-Mart — much in use and demand — are ‘anchors’ that lure more investors in the retail real estate. Various factors that drive this sector, however, include the property’s location, nearby population density, and visibility, among others.

Industrial Investment

Investing in industrial real estate is one of the best ways to optimize your investments, as it, generally, brings along with it a lot of revenue in the name of “fee” and “services”. Industrial real estate investment includes car washes, storage units and more. Properties falling under this category may be used for a variety of purposes such as manufacturing, warehousing, researching, distribution and development.