Everyone could use a little extra cash, right? After all, nearly half of American families are living paycheck to paycheck. One of the most essential things any responsible American can do is find other ways to build their wealth outside of their labor.
Developing and investing in real estate can be one of the most fruitful ways to build wealth in America. Many who invest in real estate see large profits. Today, with the popularization of sites like AirBnb, it's easier than ever to run rental properties.
What are the different types of real estate that might be worth investing in? Read on and we'll walk you through everything that you need to know.
1. Residential Properties
There are a lot of different types of rental properties out there and it might be difficult to determine which is worth your time. Residential structures are among the most common for investors: homes, apartments, townhouses, and so forth.
In these situations, an individual or family pays the owner of the property to reside in it. The length of this stay and this agreement could vary greatly. It could be a family renting a beach house for a weekend trip, or it could be a person renting the apartment they call home for years or even decades.
A common residential lease in the United States is a twelve-month lease. When this lease is over, the two parties will have the decision whether or not to engage in another lease for another year. Leases with different windows of time are common, however.
For beginning investors, renting a residential property out can be a huge source of income and education. It will take some work to do properly, however! You should make sure you fully understand what you're getting into.
These properties also might exist on the same block of land, which is known as dual occupancy. Understanding dual occupancy is important if you want to maximize the profit from the land that you own.
2. Commercial Properties
Most often when people think of commercial properties they think of office buildings or tall skyscrapers. That's right: commercial properties refer to structures that are not intended for residential use but are meant to be places of work and employment.
If you owned a commercial property, different businesses and individuals would rent or lease space from you to conduct their businesses out of.
Multi-year leases are much more common with commercial properties than they are with residential ones. Often, this means those who own commercial properties might have a more consistent cash flow than those who own residential properties.
3. Vacant Land
Of course, there doesn't have to be any sort of structure on land for it to become a profitable piece of real estate. Farmers and ranch specialists have been making a profit off open vacant land for years and years.
Open land can be leased to renters for a variety of uses. At the most basic level, one might use vacant land to provide a place for campers and RVs to spend a long weekend.
However, the leasing or sale of this vacant land to potential buyers is common and a large profit can be garnered.
Understanding Types of Real Estate
If you're hoping to get into the real estate game, it's important that you understand the different types of real estate you might choose to invest in.
Need more real estate or mortgage advice? Keep scrolling our blog for more property development and home improvement tips!
