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5 Common Types of Real Estate Investments

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There are different types of real estate investments. It meets a number of requirements from owners and potential businesses.

Properties may be residential, commercial, industrial, commercial or mixed. These different types of real estate are commonly seen in today's areas. It is important to know the differences between them to know your potential earnings and risks if you decide to invest in one.

1. Residential

Residential properties are investments in real estate that include residential buildings, houses and condos. Occupiers such as landlords and families pay the management to start living in residential properties. Condos, in particular, are a good start up investment if you need a space in your favorite location. Say for example, condo for sale Los Angeles is a good place to start your search for real estate investing in condos in a city like Los Angeles. If you want to buy a condo in a more specific location in Los Angeles like Santa Monica, you should see condo for sale in Santa Monica.

The length of stay depends on the agreement when acquiring or renting. There are leases that can be completed as short as months or as long as years. The length of stay of the owner depends on his choice and the agreement between the lessor and the tenant.

2. Commercial

This type of investment in real estate consists of skyscrapers and office buildings. If you decide to start building a building, be it small or large, you can rent them to business owners and businesses.

Most commercial properties are rented for several years. This ensures stability in terms of cash flow. In addition, the owner is protected even when rental rates start to fall. Nevertheless, there are still periods when rental rates are rising and homeowners are enjoying the financial benefits of owning a commercial property.

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3. Retail sale

Investments in retail properties include shopping centers, commercial buildings and storefronts. Most of the time, the homeowner receives a percentage or a portion of the tenant's sales from the store.

In addition to these, the landlord also earns from the basic rent paid by the tenant. These funds must be used to maintain the condition of the property. It's a must to keep the property in top form.

4. Industrial

Industrial properties are known as the usual type of investment for those who want to focus on real estate. In general, it requires less average investment amounts. In addition, it is less intensive in terms of management, which makes it less expensive than commercial properties.

There are several types of sub-industrial properties. The type depends on the characteristics of the building. Some buildings can be used for research, manufacturing, distribution and even warehousing. There are some who have a partial space for the office.

5. Mixed use

Mixed-use real estate refers to properties that combine the types provided above. There are several properties that provide spaces for retail and commercial in the same area.

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This type of property is popular with investors whose assets are significant. It offers a sense of diversification because you can use multiple spaces for different purposes. In addition, the risk is usually controlled because you can manage the spaces according to the demand.

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These are the common types of real estate on the market. One is highly distinguishable among the others. Nevertheless, there is a mixed-use property that combines the characteristics of two or more types. It is recommended to consider their characteristic to identify the benefits of investing on them.