If you are starting to invest in Richmond Heights rental real estate, you may have seen that there are several options out there. Rental property investors, especially, have plenty of choices with respect to property type, size, and function. If you’re not yet positive which type of rental property is great for you, start by grasping well and understanding the four main types of real estate and the purpose of each one. Thereupon narrow down your options until you get the sort of rental real estate that fits your needs and goals.
Residential
Most new real estate investors, when they take into account a purchase, decide on a residential rental property. Naturally, there may be a right reason for this: the residential real estate market is massive! In 2020, it was valued at $33.6 trillion and still flourishing. By definition, residential real estate is purchased and occupied as a dwelling by owners or tenants.
Within this broad category of real estate, there are several different kinds of residential properties: townhomes, duplexes, multi-family buildings, single-family residences, and more. Thanks to lifestyle and renter demographic changes, single-family rental properties have been in high demand for years. This makes investing in single-family properties one of the most famous options for new investors.
Commercial
Alternatively, commercial real estate is property used only as a workspace or to conduct a business or trade. As with residential properties, there are many different varieties of commercial properties. Office space, retailers, restaurants, hotels and resorts, and even healthcare facilities all fall under the group of commercial real estate.
There are several returns of investing in commercial real estate, as it can be a very high-earning option for many investors. Hence, the initial cost of a commercial property is probably so much higher than a residential property, which can be a stressful impediment for first-time investors to get past.
Industrial
Though technically part of the commercial real estate category, industrial real estate is a rather unique kind of real estate often designated for use in very specific ways. Examples of industrial real estate involve car manufacturers, storage and distribution centers, food processing centers, power plants, and research and development parks.
Furthermore, there are three different classes of industrial real estate – A, B, and C – so it’s vital to do your research if you are thinking of investing. Leases on industrial properties can be very profitable and tend to get very long-term holdings. And, such as commercial real estate, it can be too expensive to procure industrial property, in particular, if such properties are in huge demand.
Land
The fourth and final type of investment property you should really know about is a land investment. In many cases, raw or vacant land is purchased with the purpose to develop it in a certain way or taking advantage of the natural resources on or under the land for profit.
For several investors who own land, this would encompass extending leases that allow tenants to harvest minerals or water, oil or mining, timberland, orchards, or to use as farms, ranches, and recreational activities. Acquiring raw land, mainly, is a significantly speculative investment that carries an equally high degree of risk. Hence, in normal circumstances, leasing land can be a gainful endeavor for a real estate investor.
With too many different options accessible, several real estate investors will choose to specialize, which means they will only engage in one type or sub-category of real estate. This can be most importantly advantageous when you are just in the first stages of your interesting journey given that it takes time to know everything you need to determine about investing in each type of real estate.
If you are prepared and eager to start investing in residential rental properties, we can help! Our local Richmond Heights property management experts aid investors like you to help locate, prep, and lease quality residential rental homes. Contact us today to learn more.
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