Types of Real Estate Investments
Real estate is property consisting of the buildings and land on it, and its accompanying natural resources like water, plants or minerals; immovable property consisting of the same, that is, the land does not include personal property held by the owner for the exclusive use and benefit of the owner. Real estate investments refers to the buying of a piece of real estate, whether it is vacant land or some other asset, to develop into a profitable business enterprise. It also refers to the business opportunities real estate investments may create. One type of real estate investment is the “re-sale” of the property, which can be either a single-family residence or a multiple unit building.
Residential real estate deals with newly constructed homes or condominiums. The land can be purchased from a person at its current location, with the option to purchase it for development into a single-family home later, or to build into apartments or town houses. The land can be bought at an “as is” condition, meaning that, although it may need repair and maintenance, it still meets all standards required for a new construction and is free from any legal defects that could affect the economic characteristics of the property and its resale value.
In residential real estate investing, land can also be bought to convert into single-family homes or apartment buildings. This type of real estate investment is known as “as is” land. Most of the time, the owner has to finish out the financing for the projects, and wait for the results. However, with newly constructed homes or condominiums, the landowner will have to make the necessary repairs to the property, and be able to get tenants, before the property becomes “as is”. Most of these types of homes are usually marketed to retired persons, who do not want to move away from their current homes or place of employment just yet, and also to young families that do not have much money to buy a home, even if the land is cheap. Single-family homes are usually built more slowly than condominiums or apartment buildings and require a longer time frame to complete.
Buying Real Estate and Real Property for Investment also includes the buying and selling of “other” real property. These are real property that one owns but does not lease. An example of such a property might be land that the owner leases for a specified period of time, to build a home on. It would fall under this category if the owner does not plan to live in the house after the lease is over. Other examples include real estate that an individual owns but does not use, such as in a vacation rental, or a personal residence that is not used on a regular basis by the owner.
One of the easiest examples of “other” real estate is permanent fixtures such as buildings and homes. These types of real estate are most often purchased to rent, rather than live in. There are many different examples of permanent fixtures, including office buildings and houses. The purchase of these types of real estate involves more planning, compared to the buying of single-family homes or condominiums.
Buying real estate involves many things, including research, negotiation, and the buying of available land. Before making any decision on the type of real estate investment you want to pursue, it’s important to do your research and carefully consider all the options. For instance, buying vacant land is cheaper than buying a house, but you may have to renovate the property to make it livable. Deciding what type of investment you want to make is part of planning, so that you can make wise decisions about the type of real estate investment you want to pursue. It may be helpful to hire a lawyer to help you with making the best possible decisions.