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Four Types of Real Estate Investing

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A Cook, Software analyst & Blogger.

Overview: Real Estate Investing

“REAL ESTATE” is a term used in investments. It implies that the investment refers to the purchase of property with the intent to earn income from it over time. This is different from “fixed return” where you actually own the house for a specific period of time with the option to exchange it for a lump sum if you wish to. Real estate is usually land consisting of the structures on it and its accompanying assets like minerals, plants or other water-based assets; immovable personal property of this kind; and an interest in the immovable property, buildings or home in general. In real estate investing, the term “real” can refer to land, structures, and personal possessions used as collateral or a guarantee.

Basic types

There are two basic types of real estate investment: one is single-family residential property, which consists of single-family houses, condominiums, townhouses and apartments. The other type of real estate investment is commercial real estate, which can consist of office buildings, franchises offices, warehouses, railroads, highways, private roads, parks and other public real estate assets. Single-family residences are considered safer than commercial real estate, especially in terms of fluctuating values, especially during recession, inflation and other economic characteristics of the economy. However, single-family residences have the advantage of greater potential return, and thus, it serves as an economic diversifier.

In the United States, residential real estate has gained momentum over the past few years due to the sagging housing market, resulting in higher resale value. Also, residential properties can be purchased for a lower price than for a similar structure in the same area in the past, or sometimes even for a lower price than what is required to build a new single-family home. In addition to this, the demand for housing starts to outpace supply, creating the opportunity to get a good deal on a house. Some real estate agents are now focusing their efforts on helping individuals purchase affordable housing starts.


In brief, these four main types of real estate investing are land ownership, building or constructing a structure, buying a structure and then selling it and using the proceeds to finance a home or commercial property, renting it and making the rental payments on the property. There are many advantages in each of these categories, depending on the individual. Investing in residential properties allows investors to own the actual land that the property sits on, which can be used for agricultural purposes such as growing crops and livestock, and other uses like building homes, malls and schools. Investing in building structures allows investors to utilize the available land to build residential homes and commercial buildings; however, they are more likely to use this type of real estate for condominiums and office buildings. Investing in renting properties allows people to use the land without having to own it, which allows them to live comfortably while paying lower monthly rents.

One of the main types of real estate investing is buying land and developing it into a residential or business park. This can be done through acquiring vacant land that is not zoned for business use, through purchasing resold land or through developing grasslands and agricultural lands. The first two options involve less controversy; however, development of the land will require that certain environmental issues are remedied before construction and development can begin. Buying land, on the other hand, is less controversial, but it still involves purchasing land with the necessary infrastructure already in place. There are advantages and disadvantages to both approaches, and all four main types of real estate investing are appropriate for varying situations and financial goals.

As an example, when people choose to invest in resold or mortgage-backed securities they are essentially investing in the future income of the investor. When purchasing a home or renting an apartment, an investor will generally look for a mortgage and a lender that is willing to issue the mortgage at a pre-determined interest rate. The mortgage-backed securities that are purchased by investors are usually backed by Fannie Mae, Freddie Mac or Government National Mortgage Association (Ginnie Mae). An investor looking for a real estate investment will look to purchase tax liens, second mortgages, deed agreements, commercial real estate property and vacant land. These are all available for purchase as a portion of a larger portfolio. Investors who are interested in real estate investment will also want to check with local, state and federal government agencies to ensure that any investment they make complies with local and state laws.

Real Estate Investment Trusts (REITs) are another common type of investment. An investor can register his/her interest in a particular company and hold a share of ownership. The registered interest holder will receive a percentage of the profits from the real estate market, depending on the performance of the company.

While there are several ways that people can invest in real estate, the four types of investment are by far the most popular and commonly used methods. Choosing the right way to invest is up to the individual investor. Every person has their own personal financial needs and goals. A real estate investing program can help guide you in deciding which investment strategies will work best for your situation.

Barrie MLS Listings & Real Estate For Sale

Needless to say, real estate is one of the best investment options for the year 2021. But finding the ideal property can be quite a challenging and lonely process. Lucky for you, Dale Mundi and his team of experts are here to ensure that your search for a property is as simple and straightforward as possible. With direct access to all the up to date information including photos, maps, virtual tours and property descriptions about active Barrie Real Estate listings, making a decision about the right property becomes easier than ever before.

Barrie currently has 427 active listings. Take advantage of our advanced filter options to narrow down your property search and discover hidden gems. You can now search for homes catering to your need whether it be single-family homes for sale, townhomes for sale, condos for sale, commercial properties in Barrie or pre-construction homes for sale in Barrie with ease and book tours with just the click of a button.

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