In the last lesson, you learned about the difference between raw and undeveloped real estate compared to developed real estate. As a reminder, undeveloped real estate means it’s just land. No one has built anything on it yet. Developed means there is something there. Maybe a house, an apartment building, or a parking lot. Something.
How else can you think about real estate?
How about by type? Absolutely. There are three main types of real estate: Residential, Commercial, and Industrial.
- Single Family
These are the three main categories, but there are certainly others, which are often hybrids of these. For example, think about a hotel. Well, it’s residential in that people sleep there, but it’s also commercial. Or think about self-storage – you know, those places where you can keep all the junk that doesn’t fit in your home? It has similarities to commercial but also a bit of industrial.
Each type of real estate has different characteristics, and they are going to perform differently.
Think about owning a single family house and renting it. You’ll get a monthly check in the mail, but you may also get a call at 3am that there is a plumbing issue. Compare that to a large office building. More work? Less work? Each is different.
Up next? I will share the Holy Grail of investing with you. Two words that are at the heart of investing. If you don’t know what they are, you will soon.
The proceeding blog post is an excerpt from Get Money Smart: Simple Lessons to Kickstart Your Financial Confidence & Grow Your Wealth, available now on Amazon.
About the Independent Financial Advisor
Robert Pagliarini, PhD, CFP®, EA has helped clients across the United States manage, grow, and preserve their wealth for the past 25 years. His goal is to provide comprehensive financial, investment, and tax advice in a way that was honest and ethical. In addition, he is a CFP® Board Ambassador, one of only 50 in the country, and a real fiduciary. In his spare time, he writes personal finance books, finance articles for Forbes and develops email and video financial courses to help educate others. With decades of experience as a financial advisor, the media often calls on him for his expertise. Contact Robert today to learn more about his financial planning services.