When considering investing in property or real estate there are so many different types to choose from. Here we drill further into each type. 

What Is an Investment Property?

An investment property can be a long-term endeavor or a short-term investment. 

Understanding Investment Properties

Investment properties are those that are not used as a primary residence. They generate some form of income—dividends, interest, rents, or even royalties—that fall outside the scope of the property owner’s regular line of business. And the way in which an investment property is used has a significant impact on its value.

Types of Investment Properties

Residential
Rental homes are a popular way for investors to supplement their income. An investor who purchases a residential property and rents it out to tenants can collect monthly rents. These can be single-family homes, apartments, townhomes, or other types of residential structures.

Commercial
Income-generating properties don’t always have to be residential. Some investors—especially corporations—purchase commercial properties that are used specifically for business purposes. Maintenance and improvements to these properties can be higher, but these costs can be offset by bigger returns. That’s because the leases for these properties often command higher rents. These buildings may be commercially-owned apartment buildings or retail store locations.

Commercial properties can be used for retail, office or business purposes.

Mixed-Use
A mixed-use property can be used simultaneously for both commercial and residential purposes. For instance, a building may have a retail storefront on the main floor such as a convenience store, bar, or restaurant, while the upper portion of the structure houses residential units.

Investing in a new build is often done under the radar, but it can be worthwhile as an investment niche too. And although most investors prefer to look for old, dilapidated properties to renovate and resell, investing in new real estate could also have great returns.