Types of real estate investments include residential, commercial, industrial and retail real estate investment. Real estate investments are a good way to earn a passive income.
Residential real estate investments include vacation houses, homes, town houses and apartment buildings. These properties require an individual or family to pay the property owner to live in the property. A lease or rental agreement stipulates the length of the renter’s stay among other terms.
Commercial real estate includes office buildings which are rented out to small business owners and companies.
Industrial real estate investments include special purpose real estate, such as car washes and storage units. People pay to use the facility for a pre- determined period of time. Many renters increase their return on investments by adding service revenue streams such as coin-operated machines.
Retail real estate investments require a sizable capital and include storefronts, strip malls and shopping malls. Some properties owners receive a percentage of the business sales on top of the rent, usually to ensure that the renters maintain the property in good condition.
Real estate investments that combine two or more of these categories are known as mixed-use real estate investments. Advantages of mixed-use investments include controlled risk and built-in diversification.