Breaking Down the Options: Different Types of Real Estate Investments
More than 47% of Americans aren’t investing their money. This means millions are missing out on a huge source of potential income.
Luckily, investing doesn’t have to be overwhelming. One of the best places to begin an investment portfolio is real estate. Once you know the type of property you want to invest in you can create a diverse portfolio.
If you’ve ever wanted to know what type of options you have when it comes to real estate investments keep reading.
Real Estate Investment Trusts (REIT)
Real Estate Investment Trusts or REITs are companies that own commercial property. These companies allow you to purchase shares on the stock exchange. For those who want to know how to invest in real estate REITs provide one of the lowest maintenance options.
Every year REITs must turn 90% of their taxable income over to their shareholders. This makes REITs an appealing option for those looking to diversify their portfolio with little risk and those looking to see a return.
These assets also tend to be very liquid when compared to other real estate investments. Meaning that it is easier to turn into cash. You can sell your REIT shares on the stock exchange.
REITs are one of the best choices for those getting started in real estate. They are usually hands-off and don’t require much work from the investor.
Commercial Real Estate Investment
Commercial real estate is a piece of land or a building that is leased or rented by a business entity. Commercial property can also include property used for retail, and industrial property.
Commercial real estate investments often require leases that can last for several years. This means that it has the benefit of providing stable income over an extended period of time.
Residential Real Estate Investment
When most people think about real estate investing for beginners they usually assume they’ll be investing in residential property.
Residential real estate refers to land that is used for people to stay or live. These can include condos, apartments, and homes. As an investor in residential property, you make money by charging tenents rent to live in the space.
This option may have some of the best investment benefits, including a consistent flow of cash and tax breaks.
Mixed-Use Real Estate Investment
Mixed-use real estate investments combine 2 or more categories into one single property investment. An example of this is a building that contains storefronts as well as homes where people tenents live.
This is a great investment option for those investing in real estate because it allows you to diversify your portfolio.
New Construction and Raw Land
Raw land real estate investment refers to empty land that is available for sale. New construction is similar but something has already been built on the land.
These investment options are most appealing in areas that are projected to grow quickly.
These real estate investment options can extremely profitable for investors but often require high upfront costs.
Want More Investment Tips?
There are 6 different types of real estate investments you can make money with these. These investments include commercial, REITs, residential, new property, mixed-use, and raw land.
Investing in real estate is just the beginning of creating a diverse portfolio. If you want more investing tips or ideas for starting a new business then check out our blog.
Trevor Anderson wrote this article on behalf of FreeUp. FreeUp is the fastest-growing freelance marketplace in the US. FreeUp only accepts the top 1% of freelance applicants. Click here to get access to the top freelancers in the world.