Real estate is among the most popular form of investments, and for good reason: everyone needs a place to stay. Be it for shelter or for business, real estate is simply among those investment types that will never go out of style since mankind has moved from its nomadic roots. However, what most people don’t know is that there are many different kinds of real estate.
These kinds vary greatly and are often governed by different legal parameters. If you are interested in real estate, either for investment or for personal use, familiarizing yourself with the different types of real estate will prove useful. This guide will help you know the different types, and what they are for.
Residential Real Estate
We’ve seen real estate agents in malls and kiosks and events. They hand out flyers and brochures for townhouses or high-rise condominium units. Any space sold for the purpose of human shelter falls under ‘residential real estate’, and is perhaps the most well-known type of real estate.
Residential real estate prices consistently rise every year, and this trend seems that will continue until the future. As humans, we naturally seek shelter, and as modern humans, we can choose our shelter and suit it to our comfort as much as possible. This has resulted in a lot of different sub-types under the residential real estate umbrella such as:
– Multi-family homes
– Single-family houses.
Commercial Real Estate
Another popular form of real estate is selling or leasing commercial properties. Commercial real estate is basically any property that is mainly used for business purposes, such as office space (corporate or small business), hospitality services (chain restaurants, breakfast restaurant franchise, hotel), or even health care.
Commercial properties are considerably more expensive than the other different types, as it’s normally a business-to-business transaction, and has clear bounds. Commercial real estate transactions normally involve at least a minimum of 20% down payment, although there are a wide variety of business property loan options that can change the financial agreements. However, despite the enticing appeal of its potential profits, it also has a larger starting cost, thus making it a less popular investment for new investors.
Industrial Real Estate
This form of real estate is related to commercial real estate but is often treated as its own separate entity due to many factors. These factors being that activities permitted in an industrial property can range from production and manufacturing to large and light storage, and even to assembly and warehousing.
While it might seem like something outside mainstream popularity, industrial real estate holds a lot of benefits worth considering. It has a larger potential income due it its reliance on square meters available versus other varying factors. Its price also increases annually. While definitely not for first-time investors, it’s still a viable option for those wanting to take real estate investment seriously.
Agricultural Real Estate
Agriculture was the final key for society to finally leave its nomadic lifestyle and stay in a permanent residence. It comes as no surprise that agricultural real estate remains a valuable asset, and is a profitable investment even up to this day.
Agricultural real estate is as simple as the name suggests. using tracts of land dedicated to crops, produce, and animal husbandry. While this does require a certain kind of specialist skill set, the option of an investor purchasing land and having a professional manage the day to day operations. This allows for more leeway and freedom, as the investor can look into the natural resources of their property and hire a professional to utilize it.