There are five types of real estate investments, and each type has its own advantages and drawbacks. The fact is, not everyone is interested in investing in residential lots. So, what other options are there in South Florida? Check out this quick video by real estate investing wizard Grant Cardone.
This type of real estate property includes ranches, farms, and vacant land. Generally, the size and price of this property are quite big. In some areas where lot prices are cheap, vacant land can generate a higher commission rate.
As an agent, specializing in building lots can be profitable in rapidly growing areas. However, you may need to search farther out from the city as the spread continues. Make sure you know any particular buying requirements before you make any purchase.
commercial real estate is any property that generates income and is usually called a commercial property. This includes shopping malls, medical buildings, schools, hotels, and offices. Although used for residences, apartments are still deemed as commercial because they’re possessed to generate income.
An empty land can also be considered a commercial property if it’s marked for commercial use. The valuation of this property is more complex because you need to consider a lot of factors including income potential, cash flow, and historical revenue.
The industrial type of property is mainly used for industrial purposes. It includes warehouses and manufacturing buildings. These properties can be utilized for research, manufacturing, storage, and distribution of products. Some buildings that sell goods are deemed commercial real estate.
Investing in an industrial real estate is good for the intelligent investor because it can offer large benefits, such as higher yields, longer leases, and low maintenance. As rents go higher, income and yields go up as well. Industrial tenants also agree on long lease agreements, which can go up to 10 years.
The residential type of property is perhaps the most popular property niche with real estate agents. This includes both new construction and resale houses. As a real estate agent, you can specialize in different types of homes including duplexes, condominiums, and vacation houses.
You can even work with only high-valued properties. The strategy is to do what you please. You’re going to serve your customers better if you’re interested in your niche.
There are some real estate properties that combine any of the above categories into one project. Let’s say; you want to build a three-story office building surrounded by retail stores. You can let other businesses lease in other spaces of your building. This type of real estate property is ideal if you have significant assets because it can help control risk through diversification.
A Piece of Advice
When considering a real estate prospect, never buy it directly in your name. There are a lot of reasons, one something to do with personal asset protection. The trick is to use a legal entity, like a Limited Liability Company or a Limited Partnership. In case you face a lawsuit settlement, you can put the legal entity into bankruptcy and walk away.