Types of Real Estate and Properties Explained
Types of Real Estate is one of the best investments and is a top-growing industry. Many citizens plan to invest in this industry; however, they feel confused about what type to invest in. On the other hand, many of them do not have enough knowledge about the types of real estate, which prevents them from leveraging the best possible profits.
To prevent these issues, today, we are here to explain the types of real estate and the pros and cons of investing in them.
Let’s start!
What is Types of Real Estate?
Before delving into the types of real estate, it is crucial to explore the definition first. Typically, real estate means a physical property. The property must have a physical structure and land on which it is built. For example, if you live in a house, the land and building are considered as a real estate property.
Now, if you have vacant land without any structure on it, it is also a real estate property. In this, the physical structure of the land is considered.
Types of Real Estate Properties
Real estate is a vast arena, and it has diverse types in it. The types include properties like residential, commercial, industrial, raw land, and special purpose. Their distinct features bring investment opportunities and contribute to India’s economic growth and social development.
1. Residential-type Real Estate
Residential properties are the most common and popular types of real estate. These types of properties are designed for families or individuals to live in. Residentials are categorized by the number of dwelling units and their legal structure.
Let us inform you that it is one of the best ways of investing in the real estate industry. You can buy residential properties and put them on rent. Later, you can sell it and boost your band account.
However, for the highest profit, you must consider various factors such as location, amenities, etc. For example, if you buy a flat in popular areas like Newtown, Rajarhat, you will be able to get the highest resell value or tenants.
At the same time, if it has top amenities like an elevator, 24*7 security, etc., people will agree to spend more. If it is the opposite, you might struggle to get the right value.
Now if you are confused about how to get a property like this, connect with Vinayak Realtech. We have several projects in Newtown Rajarhat and can assist you well.
Pros and Cons of Investing in Residential Property
| Pros | Cons |
| You can put it on rent and open an alternative way of income. | Market volatility impacts on the stability of the investment. |
| Diverse your investment portfolio and reduce risk. | You must maintain the property to get a tenant or resell it. |
| Helps you to save significant taxes. | Sometimes, you might face difficulties in vacating the property (in the case of tenants). |
2. Commercial Real Estate
Commercial properties are designed to be used as a business place. Be it retail, hospitality, or office- it can be used for any purpose. These places are valued based on their income-generating potential.
Commercial properties are divided based on their usage, and the types are- office buildings, retail properties, hotels and hospitality, and mixed-use properties. Although all these properties come under commercial real estate, their features are different. For example, office buildings mostly are divided into separate units, while retail properties have prominent shops. Due to different structures of buildings, it come with different price tags.
Pros and Cons Commercial Real Estate
| Pros | Cons |
| As it gets used for commercial purposes, you get a higher rental amount. | Need a higher budget to buy this kind of property. |
| Ensure a stable income once you get a tenant. | Comes with complex management, such as complex lease agreements, tenant improvements, and maintenance needs, and causes stress on the owner. |
| Depending on the price and other factors, it offers tax benefits. | The profitability depends on market factors such as economic fluctuations, rental standards, and property value. |
3. Industrial Real Estate
The name already states that in this type, the properties mainly get designed for industry purposes. Industries include businesses like manufacturing, storage, and distribution activities.
Depending on usage, industrial real estate comes in various types, such as warehouses, manufacturing units, distribution hubs, or data centers.
Pros and Cons of Industrial Real Estate
| Pros | Cons |
| Generally, these types of tenants make agreements for a longer time, and it ensures a stable flow of income. | The market is not flooding with tenants. Hence, getting a tenant is troublesome. |
| As it invites a larger investment, it comes with a higher rental amount. | You need a high budget as the initial investment. |
| Once you agree with a tenant, you can stay tension-free. | Due to the intensive usage of heavy machines, damage to the property is common. |
4. Raw Land
Buying raw land is one of the oldest forms of real estate investment. Land comes with endless possibilities and offers freedom to the investor.
Depending on the type, it is divided into three types- raw land, subdivided land, and infill land. Undeveloped land with no structure on it comes into this category. On the other hand, subdivided lands are divided into smaller parcels, typically for residential or commercial development. Similarly, infill land is vacant or underutilized land within an urban area that can be redeveloped.
Pros and Cons of Raw Land
| Pros | Cons |
| Raw land can be used in various forms according to market demand and offers enhanced freedom. | Encroachment of the land is the biggest fear of any owner. |
| Due to increasing demand, the owner can get triple resell value after a certain period. | Without reselling or agriculture, you can’t make money out of it. |
| Selling a land is quite easy. | The pollution is rising, and it can cause erosion and land depreciation. |
5. Special Purpose Real Estate
Special-purpose real estate is designed for unique, community-serving purposes, such as schools, hospitals, and parks. As it serves mankind directly, it must follow some criteria such as proximity to the communities it serves, compliance with zoning laws, and adherence to safety & health regulations.
These types of properties are beyond pros and cons because it is for a higher purpose. It helps to elevate a whole community, and their lives and contribute to overall growth. These properties never go out of trend and serve for generations.
Types of Real Estate: Wrapping Up
Hopefully, now you have an idea of the kind of property you require. However, if you are confused, we suggest you go for residential property. These properties come with any kind of budget and open a gateway of income for you.
Connect with us to learn about different properties for diverse budgets.
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