Real Estate Investing 101
October 13, 2018
If you are reading this, you likely already understand the basics of real estate investing. When you invest in real estate, you are trying to earn money by investing in the purchase, sale, lease, or ownership of a property. There are three basic types of real estate you can invest in: commercial, residential, and industrial.
- Commercial real estate: this type of real estate is used by businesses. It is classified for multi-family, retail, or office spaces. Commercial real estate can include multi-family apartment buildings, restaurants, and business offices.
- Residential real estate: this real estate classification is for single or multi-family homes, condominiums, and townhouses that are used to live in rather than places for work. If a property has more than four units, it is classified as commercial rather than residential.
- Industrial real estate: as suggested by the name, industrial real estate serves as property for an industrial business. Industrial real estate can include properties such as power plants, factories, and warehouses for storage and shipping.
If you are considering investing in real estate, you may be nervous in the beginning. There are so many details that need to be worked out for you to make money by investing in real estate. You must also understand that real estate investments are not a sure-fire way to make money. Like any other investment, it is a risk. Are you willing to take a risk that requires a substantial amount of money in the beginning? If so, real estate investing may be for you.
Of course, if real estate investing is something you still want to do, the first step is to determine the type of real estate you prefer to invest in. Most investors tend to start with residential. Of course, that doesn’t mean you have to start there, it just generally takes less money to buy residential properties.
Once you have decided on the type of real estate you want to invest in, the next thing you need to understand are the different ways you can make money in real estate investments. We will be covering that in the next article, so stay with us.