Though not entirely without risk, real estate is widely regarded as one of the best long-term investments I can make. In this article, I’ll take you through 4 smart real estate investment options with a detailed introduction as to which need the most time, effort, and money to pursue.

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4 Kinds of Real Estate Investments

Each option has its highs and lows. These various real estate kinds can benefit different types of investors depending on their needs and goals. There are four main categories of real estate investment:

Residential real estate

Residential real estate refers to any property used for residential purposes. Such as family homes, cooperatives, duplexes, and condos. This type is perfect if I’m looking to begin building my dream home or start a family. 

Residential real estate is a wise investment because of the returns I’ll get. Few real estate companies have a pre-selling period when I can purchase properties at a lesser price. Investors take this opportunity to buy and sell them later on when their worth in the market increases. 

Commercial real estate

Commercial real estate refers to any property where the main goal is to host business operations and services. A few examples are apartment complexes, stores, gas stations, hotels, hospitals, parking facilities, etc. 

Investors in this real estate category are generally business owners who want to flourish their business in a specific location or create a working space for their employees. While sales and transactions do play a substantial role in creating cash flow, most of its returns come from the rental profit of the property. 

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Industrial real estate

When I talk about Industrial real estate, all lands, buildings, and other properties that accommodate industrial-sized activities come into my mind. These investments include the activities such as production, assembly, warehousing, manufacturing, research, and distribution of goods and products. 

Zoning laws will generally regulate which regions in a city these real estate properties can be designated so they won’t disrupt residential and other nearby places during its operations. The ROI is affected by multiple factors, including the kind of property I go with.

Real Estate Investment Trusts (REITs)

I can look at a REIT as a way of niching down in real estate investment. Trust acts as a company that focuses on a particular kind of income-producing real estate — such as hotels, apartment buildings, senior housing, and so on.

As with most investments, the more money I put in, the more I stand to gain in the future, but REITs are an attainable pathway into real estate investment for the everyday buyer.

Which real estate investment you are looking forward to doing?

You have no shortage of options when you’re all set to add real estate to your investment portfolio. You have to be very clear on your personal goals. Real estate is a notoriously illiquid investment, so make sure you understand the time commitment for your funds prior to investing. Master plan out your perfect exit strategy, then create a contingency plan in case you need to switch to Plan B.