Are you looking into diversifying your investment portfolio with alternative assets? Do you want an investment that will secure returns over a long period of time? If any of these are true, you may be interested in looking more into real estate investing.
While real estate investing often takes more work and is less cut and dry than some standard investment options, it is a wonderful option for those who would like some more hands-on investment. And real estate investing does not need to be intimidating! With proper education and preparation, you will be able to steady returns, tax advantages, and more with real estate investing.
Let’s get into the nitty-gritty of what real estate investing actually is. Real estate investing encompasses anything from renting property to selling property and everything in between. It qualifies as selling land, owning and subsequently renting out an apartment building, and anything else that falls under a “real estate” category and generates income.
Real estate investing often falls within three distinct categories: residential, commercial, and industrial. When investing in residential property, it often involves single-family homes, multifamily units that are on the smaller side, townhomes, and the like. Residential is anything that is defined as a living, and not working, space.
Commercial real estate generally falls into higher price points, and therefore larger returns. It includes large commercial work building, such as office complexes or high-rises. A restaurant, bakery, and even multifamily properties with more than four units qualify as commercial real estate.
Industrial real estate involves property and land that is used for industrial business use. This includes buildings such as warehouses, power plants, large-scale factories, and the like.
Investing in real estate provides you with a few key ways to make money, besides a once-and-done sale. One of these types of revenue would be rent payments. If you purchase a home and in turn rent it out to tenants, that can provide a steady stream of income every month. Real estate often experiences appreciation in their value over time, meaning they will slowly gain more worth.
In later blogs we will break down more clearly each type of real estate investment and how you can get started! Use this overview to think about whether real estate investing is a good choice for your current portfolio.