Real Estate Mastery Starts with the Right Information
Everyone needs land. Starting and growing families, new and old businesses, and government and private entities need land to expand their current holdings. That's what makes real estate a popular investment option. The smallest parcel of land in the right location can be sold for thrice of its original price.
When investing in land, new investors must consider what type of land they are buying and selling. Knowing what type of land one is getting can help investors narrow down their options for turning the profit on the property.
Perhaps the most familiar type of real estate for the uninitiated, residential real estate is crucial for the growth of any city or town. How can the other industries grow if they don't have space for people to live in?
Investors can buy plain land or house and lots in residential areas and rent them out. They may also develop the land and build a house to entice customers. Pre-existing homes can be renovated or updated to fetch a higher price on the market.
Malls, hospitals, museums, and other establishments where the business is conducted reside on commercial real estate (CRE). Owners of the prime real estate build industrial parks and complexes to rent spaces out. A huge chunk of their revenue comes from rent and related payments from their tenants. Because CRE has a low correlation with the stock market, they are mostly safe from sudden downshifts in global equity markets.
If buying land has a price tag too steep for an investor, they can get involved in funding investments instead. Publicly traded real estate investment trusts, in addition to traditional and online direct investing, are among the off-hand ways to invest in CRE.
Definitions of what makes a land an agricultural real estate differ per country, but it is generally agreed upon that they are parcels of land used to produce agricultural products. In the U.S., a principal residence used by a single family in a rural area that has less than 2,500 residents and is valued less than $100,000 can be considered agricultural real estate.
One way that agricultural landowners make money and find new investment avenues off selling their land is through a 1031 land exchange. A section 1031 exchange allows landowners to sell their farm, orchard, or ranch without sales tax and use the proceeds for another type of real estate or another piece of agricultural property.
The world's supply chain is manufactured, produced, researched, stored, and distributed in facilities built on industrial real estate. Industrial real estate is a resilient income generator because well-located and valuable assets enable various industries to carry out their businesses more efficiently.
Tenants of industrial real estate look for warehouses that can house manufacturing, storage, and distribution. Good warehouses must be built according to safety standards—modern sprinkler systems and regulation-size ceilings—and have adequate electrical supply. Truck courts should also be enough to meet the tenant's transportation needs.
If buying property still seems daunting, investors can opt for investment schemes related to real estate. Real estate investment trusts, mutual funds and ETFs, partnerships, and online real estate investment platforms allow investors to dive into the industry without flipping or buying houses. Investing in real estate service companies and home construction firms are also great ways to earn.