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The Different Types of Investment Properties Explained

The Different Types of Investment Properties Explained

Are you a new investment property owner, or considering getting into the world of property investment? If so, there are a few things you should know. Before getting into any kind of business venture, it's important to do your research and have a full understanding of all that it will entail.

This article aims to educate you on the different types of investment properties, the pros and cons of each, and which one could be right for you. Read on to learn more about the types of properties to invest in and the ins and outs of each.

What Is an Investment Property?

An investment property is any property that is purchased with the intention of making a profit on it in some way. This could be achieved through renting it out, selling it on, or both.

Investment properties are popular because they can prove lucrative, depending on how they are used. An investment property can yield an almost immediate payout, or it could be a longer-term endeavor.

Types of Investment Properties

If you're looking to get into the world of property investment, you'll first need to decide what type of property you want to invest in. there are a few main types, which we'll go through below. Each has its own advantages and drawbacks.

REITs

An REIT is one of the most common types of investment property. REIT stands for real estate investment trust, and it refers to a company that owns commercial real estate that individuals can invest in. They then receive a share of any profits made by the properties.

Residential Real Estate

Residential real estate refers to a property that is occupied by private individuals. This type of investment property can take a few different forms. 

Normally, a residential property will be purchased and then rented out to tenants. However, it can also involve purchasing a property, doing works on it to increase its value, and then selling it on for a higher price than was paid for it. This is what's known as house flipping.

Commercial Real Estate

Commercial real estate property investment entails purchasing some type of commercial property—an office building, a storefront—and renting it out to a business. This type of property investment is popular because it can require a less hands-on approach than residential real estate properties, for example.

This type of real estate investment can also refer to the purchasing of a building such as a storage unit facility, or a warehouse, and making a passive income from these types of properties.

The Different Types of Investment Properties

There are many different ways to invest in property and many different types of investment properties. If this is something you're interested in, or you're a current investment property owner, you may find the services of a property management company useful. Get in touch with us today to see how we can help you make the most of your investment property.

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