The Four Types of Real Estate Investing
Real estate investing involves buying real estate for resale or to develop into rental properties. Real estate investment refers to buying, possessing, leasing, and financing the sale or exchange of a property for a profit. Real estate investment also includes the purchase and disposition of raw lands, buildings, and their accompanying resources like water, crops or land; and its underlying immovable assets like mineral rights, buildings or houses themselves. Real estate investments also include the purchase of mortgage backed securities, commercial real estate loans, bank owned real estate, foreclosure properties, and the private real estate held by family members or businesses. The real estate market is a vast arena where investors have made substantial profits by purchasing, building, and selling real estate.
Real estate investment refers to various practices aimed at boosting the value of a specific asset class. Real estate investments come under four main types, such as residential real estate market, the commercial real estate market, investment real estate, and property investment Real estate investing also involves various related practices, such as landlord-tenant relations, debt financing, and land investing. Residential real estate investment refers to the process of buying residential land solely for the purpose of living. This type of real estate investment often takes time and requires large sums of money. Most residential real estate investors are wealthy individuals who seek to rent out their residential property to others for a profit.
Commercial real estate investment is often used by businesses or corporations to purchase land and establish a physical presence on the said land. Most such commercial properties are brought up for resale to clients, who will pay a monthly rental fee. In order to get the best rental rate, most commercial real estate investors employ the use of third party agents and sub-agents. These agents earn a commission on every rental they successfully arrange for their client.
Investment real estate includes such practices as leasing buildings, which can be done either permanently or for a certain period of time. Leasing is an excellent way of making profits from real estate investments because the tenants usually end up paying more than if they had simply rented the building themselves. Also, leased buildings have lower repair charges than those that are not leased, so it may be worthwhile to invest in such real properties. Real estate investing also includes the buying and selling of vacant land that is not used for any concrete purpose.
In a similar vein, Commercial Real Estate investment encompasses the buying and selling of businesses that have proven to make a profit through time. These businesses include retail stores, office buildings, warehouses, and other structures that make business purposes a certainty. The presence of these businesses makes it easier to generate income, thereby providing a steady stream of cash for investors. Real estate transactions that involve the buying and selling of commercial real estate marketplaces often go as quickly as online transactions, making it important to keep track of all details.
Of the four types of real estate investing, it is the Commercial Real Estate Investing that has shown to be one of the most profitable types of transactions for investors. Commercial Real Estate Investing involves the buying and selling of commercial structures, including warehouses and stores. For this reason, these types of properties tend to appreciate in value rapidly and are subject to less depreciation than residential properties. The sale of such real estate properties can provide investors with a steady flow of income and can help them establish a net worth that will aid in their future investments.