December 03, 2018
The Three Types of Property in Real Estate Investment
A number of questions come up 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 first arises is: Exactly what sorts of property can be invested in? Is real estate investment just about flipping houses?
No, it isn’t.
The Three Types
Speaking generally, of course, there are three different categories of property one can invest in.
- 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—basically, places where people live rather than work. (This is true for the most part, anyway—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 which point the property becomes classified as commercial real estate.
- Commercial real estate—This is the sort of property where businesses are located. Usually these are locations where customers can (or could) enter on a regular basis, or land where this kind of business could be located, even if it has yet to be developed. Also, as mentioned above, multifamily residential units—apartments—that exceed four units are included in this type of real estate.
- Industrial real estate—This is the kind of property 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, and 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.