5 types of real estate investment you need to know

Money in the Real Estate Industry

Do you want to invest in a property and you do not know what is the most suitable for you? Here we show you five options so you can see which alternative best suits your requirements.

If you plan to buy a property there are multiple alternatives. However, they may not all be ideal for you. That is why you must take into account factors such as your budget, expectations and immediate needs.

Here we show you 5 real estate investment options.

1. Residential properties

It is the most classic way of investing in the real estate market; buy places to live, whether they are houses or apartments.

One of the advantages of this type of investment is that demand – in a stable economic situation at the national level – will increase, as the population continues to grow.

Additionally, residential properties are often more protected against local currency exchange risks, and the property’s value will grow over the years.

Now, the choice between house or apartment will depend on what each buyer is looking for according to their needs and expectations. For example, it is different if you want to occupy it to live for a period with your family than if you only intend to rent to foreigners.

2. Commercial properties

The acquisition of commercial premises and offices is one of the most dynamic segments, so it can give good profits in the short term. Generates higher cash flow production compared to other real estate investments.

You also have the ability to have more leases with certain types of commercial property.

Commercial property investors, in addition to having the necessary resources, must also have the appropriate strategies, for example, good networking, timely advice and an economic expectation.

3. Industrial properties

This point includes all those spaces that are used for commercial purposes. One of the positive things about this investment is that it can be used for various uses, whether as a warehouse, as an office, to produce goods or services. The generated subspaces can also be segmented and leased.

4. Retail properties

 In New York, the construction of shopping centers does not stop. Currently, only in the Metropolitan Region there are at least 5 large-scale projects. There are more and more stores and brands, which generates greater demand for these spaces.

In this real estate alternative, variables such as distribution or location must be considered. The latter can influence the success of the premises, since many times the level of sales depends on the number of people who pass through that sector.

5. Real estate investment funds

The Investment Funds in Real Estate or Real Estate Investment Trust (REIT) in English, are those investment companies that have real estate assets and that obtain income mainly from the leases of the same. That is, they offer shares on the Stock Market, like other companies that are listed on the stock market.

In this case, investors contribute the amount necessary to buy, develop and manage real estate. Its profits are distributed as dividends. 

One of the advantages of this modality is that the investor can quickly sell the shares (or quotas) if he needs liquidity and the investment in real estate funds allows investing in commercial as well as residential properties.

In order to invest, a thorough study must be carried out that includes factors such as the size of the fund, a low level of debt, the quantity and quality of investors, etc.

to invest in real estate

Investing in the real estate market is an excellent option, since it is an area that is always growing. Likewise, it has different options which makes it an accessible investment for all capitals, ages and needs.

These range from the purchase of an apartment to the mixed-use alternative (which includes all those mentioned, therefore, it requires a large capital). 

You just have to choose one that fits your capital and needs well.

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