Property is a delicate concept for anyone to understand, which can make real estate investment rather complex. For those who want to make a smart investment, learning the terms and the types can make it easier to decide which one is for you.
Residential property refers to physical Ogden homes (condos, duplexes, etc.), regardless of whether or not they're new. Residential real estate may even refer to a co-op, where a corporation owns the building and the members buy shares in the corporation.
Commercial property usually refers to property used for business purposes and can be anything from an office in a strip mall to a 100-unit apartment building. Finally, vacant land investments refer to real estate in its raw form (untouched Earth.)
A traditional rental is a long-term rental for a piece of residential real estate. Whether that's a vacation home during several seasons of the year or an apartment with a year-long lease, rental investment properties give buyers the opportunity of a monthly rental income. There are no guarantees when it comes to investing, but there are sources to turn to if a buyer wants to maximize the neighborhood they choose.
Short-term rentals may be defined as rentals that last less than 30 days. With the advent of websites like Airbnb, the rules for short-term rentals are under intense scrutiny. Regulations and laws typically vary for renters by location and are subject to change.
Buying a home or commercial property to fix it up and then resell it in a short amount of time is called a flip. This type of investment is designed for those who don't want to play the long game. Investors find homes in up-and-coming neighborhoods, turn them into attractive properties as quickly as possible, and then sell to the highest bidder. But flips are usually expensive for a number of reasons. It's not just the cost of the repairs. Many homeowners are exempt from governmental protections, such as capital gain exemptions or loan benefits. This strategy isn't recommended for people who don't have a deep understanding of the market.
Investing in raw land isn't necessarily a popular choice, but it can be a profitable one for someone who has patient. The owner of a piece of vacant land doesn't necessarily need to take any action besides waiting for the right buyer to come along.
As long as the property has the potential, then the landholder will have the power to negotiate the right price. However, potential Juhl buyers will need to understand any restrictions the land may have before purchasing. This could be anything from zoning regulations to physical topography.
A Real Estate Investment Trust (REIT) is usually recommended for novice investors who don't have a lot of disposable income to put toward real estate. Much like a person might spread out their money in a mutual fund rather than a single stock, a REIT allows people to put a portion of their money toward a number of different properties. Any profits made on the properties will then be distributed to the investors. Real estate, in this case, can refer to anything from a skyscraper to a retail location to a block of single-family homes.
Regardless of the type of real estate investment chosen, investors should look for an option that matches up with both their lifestyle and budget. A long-term rental will require a huge time commitment, while a REIT will require practically none at all.