Categories of Real Estate Investing

Real estate is another investment you can venture into, especially if you’re more inclined to invest in properties of land and buildings.

First off, a real estate is a property that not only comprises of land and the buildings on it but also the natural resources found in the land. These natural resources include uncultivated flora and fauna, farmed crops and livestock, water and mineral deposits.

Despite media referring to the “real estate market” as something that is majorly made up of residential living, we can actually classify real estate into three broad categories based on its use. We’ll now be discussing those three.

Firstly is the residential real estate. This is made up of undeveloped land, houses, condominiums, and town houses. This also includes newly constructed and resale homes.

Residential real estate mostly focuses on the wants and needs of a homeowner as well as his or her family. This involves properties that are bought mostly for personal use, most often for providing houses and homes to families.

Then there is the commercial real estate. This category is made up of office buildings, warehouses, and retail store buildings. Shopping centers, strip malls, medical and educational buildings, and hotels are also included in this class.

Apartments are also considered commercial even though they are used for residences. This is because they are owned and used with the intent of generating income.

Also, commercial real estate is more focused on the business itself. The properties under this category are sold, leased, or used to achieve a certain predetermined business objective you set. It’s an investment method meant to help you achieve an anticipated rate of return on the funds you decided to invest.

Last but not the least is the industrial real estate. This is comprised of factories, mines, and farms. The buildings included in this category can be used for the purpose of research, production, storage, and distribution of goods.

Some buildings that distribute goods are considered commercial real estate, the classification is important because the factors, such as the zoning, construction and sales are handled in a different manner.

FSMSmart is here to provide you with the latest news updates about market trends. Never miss out on news regarding forex, commodities, consumer, financial, and technology here in FSMSmart!