We tackle a lot how stable and successful real estate investment is as this kind of investment guarantee saving the value of capital (money) for a long time as real estate (properties) is used to be a valuable product. However, before start investing in real estate, you have to know the types of properties and the pros and cons of each type. Investing in real estate is divided into two main types: investing in residential properties and investing in commercial ones.
Investing in Residential Properties
Residential property is the type of properties which is rented or sold to live in it even it is an apartment, villa, or even a chalet.
Advantages of Residential Investment
- Because of the constant need for residential properties, one can rent it easily as people always need such type of properties; even in a recession status, one can sell the property easily if the location is a unique one,
- It does not cost too much in compare to the commercial properties as it can be rented or sold with reasonable prices.
Disadvantages of Residential Investment
- There is a direct communication between the owner and the tenant as the owner will confirm the deal with the tenant and will take rental prices every month,
- You will have to face all the problems of the tenant if there is any late in paying the rental price or if he refused to leave the apartment when the contract is expired,
- The profit from residential properties are less than the commercial ones.
Investing in Commercial Properties
It is the type of properties that is sold, rented, or even constructed for a commercial purpose like building a commercial center or renting shops.
Advantages of Commercial Investment
- It is one of the successful real estate investment types as it is considered as a perfect profit source,
- You will not need to deal directly with the tenants as such type of real estate investment will be under the supervision of a real estate agent or agency.
Disadvantage of Commercial Investment
- The price of building and providing the commercial building with its need is very high in compare to residential ones,
- To get such type of tenants is too limited as the demand is limited too,
- Renting this type of properties depend mainly on economic status; even the buying process is not that easy.
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Investment in Commercial Shops
The successful real estate investment depend mainly on the full knowledge of the types of properties, the types of investment, and how to make use of the real estate market.