Real Estate is broadly divided into two categories, Commercial Real Estate and Residential Real Estate. Commercial real estate has to do with properties that are used for business and other commercial purposes.
Residential Real estate on the other hand, has to do with properties that are designated for residential purposes. For the purpose of this article, our focus will be on Residential Real Estate.
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What is Residential Real Estate Investment?
Residential real estate investment has to do with investing in properties that are for residential purposes such as home ownership, rental property or land locally zoned for residential use.
This sector of real estate is a more common investment platform for beginner investors as it requires relatively low capital to start and also has a low risk nature unlike commercial real estate.
Types of Residential Real Estate
There are different types of residential real estate properties that can be invested in for maximum profit.
Single family homes- These are houses detached from neighboring properties. This term could also apply to luxury or vacation homes as well.
Luxury homes- These are homes that are built and designed for high end neighborhoods. It usually includes sophisticated designs and modern facilities.
Shortlets- These could serve as vacation homes where people come to stay temporarily rather than lodging in a hotel.
Multifamily buildings such as duplex, triplex- These involve several units that can be rented out to different tenants.
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Difference between Residential and Commercial Real Estate
Although they may look very similar, they differ in their purposes. Commercial real estate has to do with buildings that are used for commercial purposes such as office buildings, hotels, malls, warehouses, industrial buildings and so on.
Residential Real Estate consists of buildings designed for non-commercial purposes such as single family houses, multi family houses, duplexes, lands designated for residential purposes only.
How Profitable is Residential Real Estate?
Residential real estate does not require as much capital as commercial real estate so it is a good entry point for real estate investors. Sourcing for finance is considerably easier as compared to commercial real estate.
Residential Real estate is profitable as there are different ways to invest in it. Investors can choose to invest in land or property flipping which involves renovating a property or developing a land before reselling at a higher price. Some can also choose to invest in rental property for long term investment.
To make the most from residential real estate it is important to take note of some important factors that would affect the profitability of your Investment. Some of them include location, current market trends, property management and so on.
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Residential real estate provides good investment opportunities for beginner investors due to its low risk nature, high reward in profit and the ease in management as compared to other aspects of real estate.
At MKH, we have multiple affordable investment opportunities you can take advantage of. We also offer real estate consultancy where we properly guide you on what investments to make to guarantee maximum profit. You can contact us by clicking here for more information.