By Dennis Isong
Real estate is an industry with diverse opportunities all over the world. People are now focused on investing in land and structures.
Real estate has many components you can focus on and this helps you know how to make your money.
Though, each has its dynamics but with enough knowledge, you can do well in real estate.
If by any chance, you feel like investing in real estate, I think you should be aware of the types of real estate because with this, you would know the choice to make.
Real estate majorly involves two parts which are: Land and Structures (elements on land).
Land and other assets can be used for various purposes ranging from; offering people a home to live in, utilization of land for farming, commercial property for businesses, industrial property for production, etc.
Why does real estate work for everyone?
- Land easily appreciates and you can get your money back stress-free.
- Structure property can be manipulated to add to its market value.
- Land can be developed or leased out for farming.
- Land is perennial.
- Location does a lot of good for your property. In fact, it is the highest determinant of how fast you are able to sell.
Types of property
- Residential property
- Commercial property
- Industrial property
- Land property
1. RESIDENTIAL PROPERTY
Residential property is a property type that brings in more income. This type of property has a higher chance of bringing return on investment for anyone thinking of focusing his/her real estate investment in it. People always need a place to live, thus, it’s a property type that is always on the move.
Examples of these are; family houses, villas, hostels, etc. You can resell existing homes and new structures. It’s easy to rent out. It’s easier to secure financing for them due to the low cost of entry. There are multiple forms of investing in residential property. There’s an option to renovate to taste and this action doubles its income.
2. COMMERCIAL PROPERTY
Commercial properties are majorly for commercial purposes. These are found in certain areas. However, you can also find commercial properties around residential properties, this is quite common in so many places in Nigeria.
Commercial properties include; restaurants, schools, shopping malls, etc. Commercial properties are mostly rented out. They have long-term leases and they provide property owners to demand more rent providing a higher income.
Commercial property generates more income all year round. They can be more in one structure unlike residential property and the price for commercial property depends on the income it generates.
Land is a vacant and undeveloped property which has no improvements made on it. Land is the least expensive in the real estate property type; however, the type that sells faster. Land does not need a high-cost maintenance, meanwhile, it keeps appreciating in value. Land is often bought for various reasons such as the rights to natural resources, development, etc.
Apart from that, there are other things lands are used for. They can be used for farming, ranching, planned urban development, etc. investing in land which you bought for a purpose can be capital consuming. These could either involve renting or leasing.
4. INDUSTRIAL PROPERTY
Industrial property is a unique type of real estate. This type of property is specific as the only thing it is meant for is manufacturing of goods. Also, it includes storage facilities, production houses, solar generating stations, warehouses, etc. Industrial properties are not available anywhere close to where many people are. Oftentimes, it is located in far off places so that people won’t be affected by air pollutants coming from the manufacturing company. The capital for investment largely depends on its nature and the location of the property.
Dennis Isong is a real estate professional. Download his free real estate guide here.