Four Major Types of Real Estate Properties

One of the most tried and tested ways of investing is investment in real estate. The good thing about investing in real estate is that you can transform it into various formats to reap the benefits. It is common knowledge everyone possesses that real estate does generate active and passive incomes. But, not many are aware of the  types of real estate investments and their pros and cons. 

An investment does not guarantee profits, and it all depends on the current market situation. Before taking a step toward investing in real estate, the questions one should ask are: What are the different types of real estate? And what are the types of real estate investment? 

  1. Residential real estate:

Residential – the name says it all. This type of real estate consists of apartments, independent houses, villas, townships, and condos. As we know, these are the common property or house types one invests in. Usually, there is always appreciation or increase in the price of villas or independent houses like ten to 15 years. At the same time, the appreciation timeline for the apartments is only seven years.

  1. Commercial real estate

Commercial real estate consists of shopping centers, restaurants, office spaces, hospitals, commercial complexes, and more. Investing in commercial real estate is a little more expensive than residential properties, but the profit generation is better here. Leasing real estate, especially commercial real estate, is a good way of earning income. Investing in commercial real estate through a loan might be a challenge as most of the banks in India provide only 50% to 70% of the loan cost, and you might also have to pledge a mortgage.

  1. Industrial real estate: 

Industrial real estate properties include buildings, factories that are used for warehouse or goods manufacturing. Usually, industrial real estate elements are located far away from the main area or city as there are chances of harmful chemicals or pollutants. This type of real estate investment might be a tricky affair as one cannot estimate the capital investment, especially if the agricultural or farmland is converted to industry building or factory because the price of this building will be much higher than the farming lands. Industrial real estate investors have a few challenges before investing in these. Another one would be while renting out the industrial unit as the tenants’ requirements keep varying very frequently. The Indian laws and orders imposed on the industrial establishments are also another challenge the investors have to deal with.

  1. Investing in the land:

Investing in land is the least expensive and more natural investment many would opt for. There are two forms of land – agricultural or farmlands and residential lands. It is always considered that buying a piece of land does not have insecurities like theft, damage, or maintenance. Apart from that, there is always a high possibility of appreciation of the land, and a passive income generation is also an open option one would have.


Wrap up: Every investment irrespective of the sector has its advantages and disadvantages. One has to understand and analyze real estate is what type of investment to know the investment growth prospects.