3 Types of Property in Real Estate Investment | TA Closing


December 03, 2018

The Three Types of Property in Real Estate Investment

The Three Types of Property in Real Estate Investment

Several questions arise when someone is becoming interested in investing in real estate—whether they’re looking to buy in Cranston, Rhode Island; Daytona Beach, Florida; or Northampton, Massachusetts. This makes sense since there are issues in real estate investment that go well above and beyond what a person is likely to find in the act of purchasing their own home.

One of the questions that generally arises is: What property can be invested in? Is real estate investment just about flipping houses?

No, it isn’t.

The Three Types

Speaking generally, of course, one can invest in three different property categories.

  • Residential real estate—This does include flipping houses. But it also encompasses the regime of providing housing for renters. The types of property included in this category are condos, townhouses, and free-standing homes, where people live rather than work. (This is true for the most part—the occasional “home-office” aside.) However, it should be noted that sometimes a rental property may extend beyond four units in size—which causes it to be considered apartments. At this point, the property becomes classified as commercial real estate.
  • Commercial real estate is the sort of property where businesses are located. Usually, these are locations where customers can (or could) enter regularly or land where this kind of business could be located, even if it has yet to be developed. Also, as mentioned above, this type of real estate includes multifamily residential units—apartments—that exceed four units.
  • Industrial real estate—This property is where industrial “behind the scenes” elements of business get done. These locations are usually not “open” to customers in the conventional sense, though generally, there’s no prohibition against the occasional customer visitation. This category includes locations such as warehouses, plants, factories, and shipment facilities.

Anyone interested in investing in real estate will want to be certain the property vests with clear title. We at Topouzis & Associates, P.C. are experienced and skilled in the title search process. We provide Title Insurance to ensure no surprises come slinking out of the nooks and crannies of a property’s history to wreck an investment after the fact. Contact us if you would like to know more.