Categories: Tips

Different Types Of Real Estate Investment To Know In 2022

Investment Management is very vital. When real estate investment is concerned, there are different types to consider. It includes land & crowdfunding, platforms, REITs, and apartment rentals. Basically, they are all into two major categories, namely, physical investments like commercial and residential properties, and land. The other investment modes include owning physical property like crowdfunding platforms and REITs.

5 Types Of Real Estate Investment To Consider

1. Crowdfunding platforms:

Investors can access investments through these platforms to derive higher returns. However, they are also likely to face significant risks. A few crowdfunding platforms are restricted to accredited investors. They should either have a joint with a spouse or an individual net worth of over $1 million. It excludes their home value or the last two years’ annual income exceeding $200,000 and with a spouse it will be $300,000. But you need to consider the fact that the majority of crowdfunding platforms are new and yet to be proven as fully reliable. There are a few that provide non-accredited investors with access to investments, something not otherwise possible. Such investments are offered in REITs or non-traded REITs.

2. REITs:

Real-estate investment trusts or publicly traded REITs are organizations owning commercial real estate. It can be malls, offices, hotels, etc. Shares of such companies can be invested on the stock exchange. REIT investment allows you to make investments in the properties owned by these companies. According to law, REITs are to return every year their taxable incomes by 90%. Besides diversifying in the real estate portfolios, investors also receive attractive dividends. When compared to other investment forms, more liquidity can be enjoyed with publicly traded REITs. You are free to sell off your shares whenever desired if require cash. But then, you need to do so with the help of a legitimate brokerage.

You need the right brokerage to understand the taxation policies on real estate. For instance, there is Life insurance taxable estate which most people need to be made aware of.

3. Commercial real estate:

It is considered to be the space that is either leased or rented by a physical or Online Business. A few examples include a single business, leased restaurants, strip malls having numerous businesses, gas stations, etc. Commercial real estate includes retail and industrial ones. The latter refers to those properties where products are housed or manufactured instead of being sold like factories or warehouses. Aside from product storage, some warehouses can also be rented for other short-term activities, like event hosting, filmmaking, photoshoots, etc.
Retail space is the location where consumers get to purchase a service or product such as a clothing store. Online Business deals with online purchases and sales. Commercial properties get more rent and enjoy long-term, steadier income.

4. Residential real estate:

It can be any space where people stay or reside like vacation homes, condos, and single-family homes. Residential Investment Management allows rent collection from property tenants. Money can also be made as the property appreciates in value. Residential investing can be done in different ways. It may be complicated like flipping/buying a home for profit or renting out an available spare room.

5. Raw land:

Investors generally prefer purchasing land to develop a residence or commercial building. However, investing in land with the purpose of development does require some research and taking the help of a legitimate brokerage It requires huge capital and in-depth knowledge of prevailing building codes, flood plains, zoning regulations, etc. Also will be required a better understanding of the current commercial and local residential rental markets.

Which Type Is The Most Preferred One?

Be it commercial or residential properties, you need to first do your homework and research thoroughly. Your investment might see a dip if there is not much demand for commercial space or homes in your area. Investments will also get blocked if there is a significant decline in property values. Crowdfunding platforms and REITs can help enhance your portfolio and allow you to take a hands-on approach considering your Real Estate Investment.

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