There are many ways to invest in real estate, but only one method is truly lucrative and successful – residential real estate. The technical distinction between a residential property and a commercial property is this: Residential property is generally single family houses and one to five unit residential rental properties while commercial real estate includes any multi-unit retail business, office, or commercial retail building with at least five units.
Commercial real estate tends to be on a much larger scale than residential real estate, however, since it encompasses large retail outlets such as malls and shopping centers, restaurants, office buildings, and many more types of commercial properties. Many of the properties that fall under the category of residential real estate are considered to be tax exempt by the government because they are considered “permanent fixtures”.
Investing in residential real estate allows you to make money even if there is no investment property at stake. Since you do not have to worry about paying taxes and paying capital gains, investing in residential real estate can often be a better financial deal than investing in real estate that has a higher value, especially for those people who do not have a lot of money to invest. While this is true for all real estate investments, it may be particularly true for residential real estate investments.
You will also get to have the luxury of owning an investment property, which can often mean you will get more value from your home. Owning an investment property also gives you the opportunity to own a piece of property without having to purchase or maintain it on a regular basis. A lot of people choose to invest in residential property because they believe that the property will appreciate in value over time. As such, many residential investors make their investment investments in residential real estate when their property values are relatively low, thus allowing them to own a home for years to come.
A lot of residential investors think that buying an investment property will provide them with the type of return that is needed to justify making the investment, but this is not always the case. Buying residential property requires you to put some money down on the property so that you can own the property, pay taxes and maintenance costs, and get out from underneath a significant amount of debt, among other factors.
So when considering whether or not to buy real estate, be aware of the differences between residential and investment property before making your final decision. Real estate investing can be a good way to get into the property market, but it is not for everyone.