Real estate investment has always been one of the most attractive options for those looking to expand and diversify their wealth. Thanks to property tokenisation, it is now possible to invest in real estate in much more affordable amounts.
Benefits of investing in different types of real estate
Investing in real estate not only offers security, but can also generate attractive returns compared to other forms of investment. Each type of real estate has specific benefits depending on its purpose.
There is more to the real estate market than just buying a flat and renting it out; there are a variety of strategies and approaches that can be tailored to the goals and capabilities of each investor. The following are some of the most popular options:
- Tourist rental: This modality has become popular with platforms such as Airbnb. It consists of renting properties for short periods, generally to tourists. It tends to offer higher returns than traditional rentals, but requires more active management and is subject to seasonal fluctuations.
- Traditional rental: This is the most common form of investment, where a property is rented for a long period to tenants who use it as their primary residence. It provides a stable and steady income.
- Room rentals: Particularly popular in urban areas and with students, this involves renting out individual rooms in a property, potentially allowing for a higher income than renting out the entire property.
- Flipping house: This strategy involves buying properties, preferably at a below-market price, refurbishing them and then selling them at a higher price. It is a way to make a short-term profit, but requires good market knowledge and the ability to manage refurbishments.
- Construction: Buying land and building properties for sale or rent. This strategy requires a higher initial investment and a deep knowledge of the construction industry, but can generate high returns.
- Coliving: A growing trend in urban areas, where several people live together in a shared space, but with private rooms. It is a mix between traditional housing and shared accommodation, and can be an excellent investment option in areas with high demand for housing for young professionals or students.
- Commercial: Under this category, we find commercial premises, offices and shopping centres. They offer attractive returns, especially in high traffic or growth areas.
- Industrial: Includes warehouses, factories and industrial buildings. They are ideal for those who are looking for long-term rental income and have a good knowledge of the industrial sector.
- Land: Although it does not generate immediate income, land can be a wonderful long-term investment option, especially in areas with development potential.
Each form of real estate investment has its own advantages, challenges, risks and requirements. Some people prefer the stability of traditional leasing, while others seek the excitement and potential high returns of flipping or construction.
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