There are numerous types of real estate investments including land and crowdfunding platforms, commercial real estate, REITs, and apartment rentals. For the most part, all investments in real estate can be broken down into two basic categories:
- Physical investments in real estate (i.e., commercial properties, residential properties, land)
- Other investing modes that require no physically owned property (i.e., crowdfunding platforms, REITs)
A high return can be offered by physical, traditional real estate investing. But it can have high ongoing costs and requires more money upfront. With a lower financial entry barrier, crowdfunding platforms and REITs means that multiple types of real estate can be invested in for less than it would cost for a single traditional property investment. Another distinct advantage of these alternative investments in real estate is that, to start investing, you don’t have to leave your house.
You may want to consider the following five types of real estate if you are looking to invest.
Raw Land
Typically, either for financial or commercial development, investors purchase land. There can be a lot of research involved in this endeavor for an investor to succeed. This is particularly applicable if the investors, themselves, have intentions of developing the land. If you have a high level of knowledge of all things related to real estate and have extensive capital to invest, you could be well suited to this type of investment.
Commercial Real Estate
When space is leased or rented by a business, it is referred to as commercial real estate. Commercial real estate investment examples would be a leased restaurant, strip mall, gas station, single business office building, etc. To the property owner, each business in the building pays rent. Retail and industrial real estate both fall under this umbrella. There are both pros and cons to this type of investment.
Residential Real Estate
Vacation homes, condos, single-family homes – basically anywhere people live – are referred to as residential real estate. By collecting rent, these types of investors make money from their property tenants. There are numerous forms of residential real estate investing including purchasing/flipping a house for profit, renting out a spare bedroom, and more.
Crowdfunding Platforms
Both significant risk and high returns are carried by the real estate investments offered to investors in the case of real estate crowdfunding platforms. Some offer non-accredited investors investment access that they might not otherwise be privy to. Others are only open to investors who are accredited (have significant net worth). Historically, there’s a relatively short track record here to use for any type of significant analysis, but they can be highly liquid.
REITs
Publicly traded real estate investment trusts – REITs – are companies that own real estate on a commercial level like malls, offices, hotels, etc. On a stock exchange, shares of these companies can be invested in. The real estate these companies own is being invested in with fewer risks than would ordinarily be associated with the owning of real estate. Every year, to their taxable income shareholders, at least a 90% return is required for REITs. There are numerous benefits for REITs over other types of real estate.
Looking to Invest in Real Estate? Talk to NJLux Real Estate
I’m a Bergen County realtor and your source for Bergen County luxury homes for sale and luxury real estate/New Jersey listings. I use strategic online marketing techniques, cutting-edge technologies, social media platforms, and keyword optimization to sell New Jersey luxury properties.
My name is Joshua M. Baris.
Let’s talk about real estate! There are numerous ways to get in touch. Call me at 201-771-1969 or email me at josh@njlux.com. You can FB message me at m.me/njlux or, if you choose, open the lines of communication by using my website’s convenient online form.
