Real estate investing is the purchase, ownership, lease, or sale of land and any structures on it for the purpose of earning money. Real estate generally breaks down into four categories: residential, commercial, industrial, and land.Residential real estate: Residential real estate consists of single-family homes, multi-family homes, townhouses, and condominiums. Occupants may rent or own the properties that they live in. Homes larger than four units are generally considered commercial property.
Commercial real estate: Commercial real estate is property that is used for the purpose of business. Commercial real estate is classified as office space, retail space, or multi-family homes. Some examples of commercial real estate properties include business offices (office), restaurants (retail), and large apartment buildings (multi-family).
Industrial real estate: As the name suggests, these properties serve an industrial business purpose. Some examples include shipping or storage warehouses, factories, and power plants.
Land: Land generally consists of undeveloped property with no structures on it. There are limited ways to earn money from land as an investment. Landowners can earn money through land usage, such as agriculture, or upon the development or sale of the land.
In addition to property types, there are three main ways to make money from real estate investments: interest from loans, appreciation, and rent.