Types of Real Estate Investment

Real estate property investment is the process of investing in any form of land or property. It is important to keep in mind that real estate investment is better than personal assets which aren’t completely attached to the ground.

Real estate investments can yield high returns in different approaches. Some include physical homes, like land, homes, or different varieties of residences; others contain properties that don’t need to physically exist, like crowdfunding and REITs. 

While the conventional technique of investing would possibly provide tremendous profits, it additionally involves high investment costs. However, due to the fact REITs and crowdfunding platforms have fewer entry hurdles, hence you may participate in different types of real estate investments in place of simply one conventional way of purchasing real estate property. 

This article will teach you about the various types of real estate investment in India that you can leverage to save your future.

Also Read: New REITS Regulations By SEBI For Fractional Investment In Real Estate

Types of Real Estate Investments

1. Commercial Real Estate

Commercial real estate investment is a place rented or leased by the company from the owner to conduct the day-to-day activities of the business. It could be a gas station, restaurant, mall, single business, or anything else. A company can either own the property or it can choose to pay rent for such property which is also one of the types of commercial real estate investments.

It could further be divided into two parts, such as industrial real estate or retail real estate. Industrial real estate is such properties where a company conducts its major activities like manufacturing or storing, i.e., factories or warehouses. 

While retail real estate is a type of property where customers can directly come to buy stuff. It could be a clothing store or a grossing store. Commercial properties are generally there for longer periods and generate more revenue than residential properties. Despite, the high cost involved, it could be one of the best types of real estate investments.

Also Read: Comparison of Commercial vs Residential Fractional Investment

2. Residential Real Estate

After commercial let’s explore residential real estate which is one of the types of real estate investment. These properties are any place where people live, such as single-family homes vacation homes or else. People who make investments in residential real estate make money by collecting the amount paid by the talent as rent.

However, investing in such real estate investment funds can be as simple as renting out a spare room. You do not need to invest any extra amount in it all you have to do is buy a property and rent it to others.

When it comes to types of real estate investments, residential real estate investment could be the perfect thing. You need to do some research, and once you get the right property at the right place, it can help you make some genuine sum each month. The value of the property goes up over time, and you can also get a decent salary if you sell that property later which could be the best type of real estate investment. 

3. Raw Land

This is another type of investment in real estate properties.  Investing in raw land can be a daunting task, as it involves a lot of money or capital. Apart from these, you also need to have a deep knowledge of all the real estate things like building codes, zoning regulations, and flood plains. You should also do some research to develop an understanding of residential and commercial rental market trends. It could be one of the best types of real estate investments if you have a good amount in your bank.

It could be one of the simplest processes of investing, and it costs way lower as compared to commercial or residential property. The maintenance cost of Raw land is also not high, and one doesn’t have to worry about repairs and other stuff. It also allows you to buy, hold, lease or even build something on the land you acquire.

Also Read: Real Estate Bonds vs Fractional Ownership

4. REITs

When a person invests in physical property through the stock exchange by buying stocks of the companies that manage the business’s actual property, which include workplaces, hotels, and shopping centers. 

These companies that manage real estate investments and conduct their activities as trusts are referred to as REITs or Real Estate Investment Trusts. Because REITs are required to distribute 90% of their taxable earnings to shareholders annually, buyers may additionally diversify their portfolios and get good sums as dividends.

You may effortlessly meet your monetary requirement by promoting your stock market shares if you ever run out of cash which makes it one of the best types of real estate investments. Investing in publicly traded REITs can also be done through a brokerage account.

You may earn extra money through REITs while not having to be actively involved in the property. Investing in a REIT relieves you of any private obligation for the burden. It will even assist you in income a consistent profits. The ability of REITs to diversify your portfolio at the same time as retaining flexibility and liquidity is another crucial gain of investing in them.

5. Crowdfunding

Crowdfunding is one of the types of real estate investments with high returns, and it also involves significant risk. Real estate crowdfunding is a way to raise money online to buy real estate property from many traders. Whether it is people or agencies, you can still get crowdfunding via potential investors on the Internet and social media platforms. The idea in the back of crowdfunding is that humans may be willing to invest a small amount in such projects. One can raise massive sums of cash through crowdfunding in a very short period of time. 

It is an exceptional method to diversify your investment portfolio without investing big sums of money. It additionally gives access to opportunities that don’t supply entry without the help of different investors. It best requires little effort, and the complete procedure may be done online to get some types of real estate investment funds.

Also Read: How to Start Fractional Investment in Real Estate

The Button Line

If you are planning to invest your money in real estate, i.e., residential or commercial properties, make sure you have given it enough thought and done deep research part. You should be aware of your local area as there are chances that some government plans can turn your investment to zero in no time. Hence, before making any such decision, make sure you are not interfering with government property, otherwise, you can lose all your money.

You can go with REITs and crowdfunding, investing in property without actively owning a physical one could ensure that your money wouldn’t go in vain. So, before making any investment decision, you should have analyzed different types of real estate investments.