TYPES OF REAL ESTATE TO INVEST IN

There are different types of real estate. Yes. This article serves as a guide to both new and old investors. Most new investors in real estate know this, but what they don’t know is how many different types of real estate investments exist.  

In your quest for financial independence and passive income. You might decide this is an area in which you want to devote significant time, effort and resources.

Each type of real estate investment has potential benefits and pitfalls. Which includes unique peculiarities in cash flow cycles and lending traditions. Standards of what is considered appropriate or normal do exist. Brent Housing would suggest a thorough study before you make a decision.

Let’s jump right into it.

RESIDENTIAL

In real estate, residential structures are properties such as houses, apartment buildings, townhouses, and vacation houses. Where a person or family pays you to live in the property. The length of their stay is based upon the rental or lease agreement. Most residential leases are on a twelve-month basis in Nigeria and other countries of the world.

COMMERCIAL

Commercial properties consist mostly of office buildings. If you were to take some of your savings and construct a small building with individual offices, you could lease them out to companies and small business owners, who would pay you rent to use the property. 

It isn’t unusual for commercial real estate to involve multi-year leases. This can lead to greater stability in cash flow, and even protect the owner when rental rates decline. One consideration is that markets do fluctuate, and rental rates could increase substantially over a short period of time.

RETAIL

Retail properties consist of shopping malls, super marts, small shops and other retail storefronts. In some cases, the property owner also receives a percentage of sales generated by the tenant store in addition to a base rent to incentivize them to keep the property in top-notch condition.

INDUSTRIAL

Industrial real estate consists of everything from industrial warehouses, storage units, car washes. Or other special purposes real estate that generate sales from customers who use the facility.

Industrial real estate investments can often have significant fees and service revenue streams. 

MULTI PURPOSE

Multi-purpose properties are those that combine any of the above categories into a single project. For example, an investor in Abuja took several million dollars in savings and found a mid-size town in Lagos state.

He approached a bank for financing and built a mixed-use three-story office building surrounded by retail shops.

The bank, which lent him the money, took out a lease on the ground floor, generating significant rental income for the owner. The other floors were leased to a health insurance company and other businesses. The surrounding shops were quickly leased by a hair salon, a membership gym, a quick-service restaurant, and an upscale retail shop.

However, mixed-use real estate investments are popular for those with significant assets because they have a degree of built-in diversification, which is important for controlling risk.

So with this knowledge about different types of real estate to invest in. Making a decision now won’t be difficult. Brent Housing is here to walk you through every step of the way. Just click here to contact us.

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