There are four main types of real estate: residential real estate, commercial real estate, rental real estate, and vacant land. Residential real estate deals with houses, condominiums, townhouses, mobile homes, and apartment buildings. These houses are usually manufactured or built on lands and sometimes on private lands owned by individual residents. Condominiums and townhouses are constructed on adjacent lands with the aim of selling or renting them to individual tenants. For this reason, they do not form part of the property used by the residents themselves. Industrial or commercial real estate deals with industrial or commercial buildings, which are generally large, stand alone and made generally from concrete and other materials rather than soil.
Within the main categories of real estate, there are also sub-categories. The main categories are: residential, commercial, industrial, and vacant land. Within the main categories of real estate, there are also sub-categories:
Real estate investment trusts are generally viewed as one of the easiest ways to invest in real estate, mainly because there is very little risk involved. The funds generated by the trust are used primarily for the purchase and development of the rental property and capital expenses. Funds earned by the trust can be paid directly to the investors, while retained earnings are returned to the shareholders. This is the simplest way to invest.
Commercial real estate is the opposite of residential real estate. It is a type of real property that is developed mainly for business use. Usually, the buildings are constructed with state of the art equipment, which increases their capacity to attract tenants and customers. In commercial real estate, most of the land is leased out to businesses or organizations that need office space or store location. These properties include warehouses, shopping malls, and industrial centers.
Vacant land may be in use temporarily, or it may be earmarked for development. The term "permanent property" refers to those pieces of real estate that are developed solely for use as man-made structures. A good example of such a property is an airplane hangar, convention center, or warehouse. Such properties do not require any maintenance or upkeep, since they are permanently attached to the earth.
Another method of real estate investment trusts is to invest in real estate rental properties. Property owners can sell their units to investors who plan to make a profit on their rental returns. An investor can buy or construct apartment complexes, condominiums, or townhouses. There are also opportunities to invest in vacant land, like farm land. These are not popular ways of investing, because most investors choose to invest in homes, houses, and other real properties that produce income.
Real estate investing is very lucrative, but it does come with some risks. Most investments are made with money that is invested in fixed interest bonds. Bonds must be purchased at a fixed interest rate for many years. This type of investment is known as "secured debt". Although there are many people who make a great deal of money through this method of investing, there are also many people who lose money in the process. This type of investment may not be right for every investor.