How to Directly Invest in Real Estate❔

Written By James Chen

Some of the most common ways to invest directly include:

✅ Homeownership

✅ Rental properties

✅ House flipping

👉🏻 If you buy physical property (e.g., rental properties, house flipping), you can make money in two different ways:

1⃣ Revenue from rent or leases

2⃣ Appreciation of the real estate value. 

Factors Affecting Real Estate Price

✅ Location

✅ Employment rates

✅ Local economy

✅ Crime rates

✅ Transportation facilities

✅ School quality

✅ Municipal services

✅ Property taxes

Pros of Investing in Real Estate

✅ Offers steady income

✅ Offers capital appreciation

✅ Diversifies portfolio

✅ Can be bought with leverage

Cons of Investing in Real Estate

✅ Is usually illiquid

✅ Influenced by highly local factors

✅ Requires big initial capital outlay

✅ May require active management and expertise

Types of Real Estate

There are five main types of real estate:

1⃣ Residential real estate: Any property used for residential purposes. Examples include single-family homes, condos, cooperatives, duplexes, townhouses, and multifamily residences with fewer than five individual units.

2⃣ Commercial real estate: Any property used exclusively for business purposes, such as apartment complexes, gas stations, grocery stores, hospitals, hotels, offices, parking facilities, restaurants, shopping centers, stores, and theaters.

3⃣ Industrial real estate: Any property used for manufacturing, production, distribution, storage, and research and development.

Examples include factories, power plants, and warehouses.

4⃣ Land: Includes undeveloped property, vacant land, and agricultural land (farms, orchards, ranches, and timberland).

5⃣ Special purpose: Property used by the public such as government buildings, libraries, parks, places of worship, and schools.