To be successful in your investment strategy, the most important decision you will ever make involves the types of properties you choose to invest in. There are a number of important factors that go into that decision, all of which will determine the type of investor you choose to be - as well as the levels of success that you will achieve. Things like general location, needed repairs, the type of lease and income potential, as well as the expenses necessary to keep the property profitable are all important factors. In addition, the necessity for property management, the ability to defer through depreciation, financing availability, and any unique features that render the property more attractive can often make a particular property even more attractive. Knowing those factors can help you to choose between the five types of real estate opportunities described below.
The first type of popular investment real estate is the apartment complex, which includes everything from high-rise complexes to duplex buildings. The availability and nature of rental properties is dependent upon the needs of the local market. Most apartments, as well as duplexes, can be rented either annually, or month to month. Keep in mind that the availability of laundry, storage, and garage facilities can add to the value and desirability of any location. Office buildings are another type of property, but one that requires a more experienced investor. Many first time and novice investors steer well clear of office properties, despite their potential for profit and their ease of management. Office buildings differ from most investment properties in that they are generally leased on a square foot basis.
Shopping centers, warehouses, and industrial buildings are a few other great investment opportunities, but like office buildings they come with their own unique features that can make them somewhat daunting to newcomers to the investment field. Shopping centers can range from strip malls to large complexes, and the management of such a center requires acquiring a number of tenants to lease space for their shops. Tenants within a shopping center generally pool costs of maintenance and upkeep. Most investors just getting started with commercial investments begin with small strip malls with three or four small businesses. Warehouses and industrial buildings are even more exotic for investors. Warehouses are generally leased out for storage, and tenants come and go quite frequently. For that reason, the warehouse investment market is anything but stable. Industrial buildings, on the other hand, offer more long term leasing opportunities, and even offer the potential for a sale and leaseback opportunity - enabling an investor to purchase the property from a company and then lease that property back to the seller.