If you are interested in investing in real estate, you have many choices. You can choose industrial real estate, commercial real estate, listed REITs, or property management companies. Each of these options has its own advantages and disadvantages. Before you make a decision, make sure you have your own personal goals in mind.
Commercial real estate
If you are looking to make a profit, one of the best ways to do this is to invest in commercial real estate. This type of property is also known as income property or investment property. Its main purpose is to generate a profit, whether it is in the form of rental income or capital gains. There are many different ways to make money in this type of property.
Commercial real estate requires a higher initial investment than residential real estate, but the return potential is much higher. Usually, commercial properties are leased to businesses instead of individuals. In addition, triple-net leases are common, which place responsibility for the property’s costs on the leasing tenant. Since these types of leases are for business use, these businesses tend to be more reliable in paying rent and complying with lease terms.
Industrial real estate
Industrial real estate includes land, buildings and other property types that are used for manufacturing, production and storage of goods and services. These properties are often located in specific zones designated for these uses. These zones are often outlined in zoning maps. In addition, these properties often offer higher rents than residential real estate.
The industrial market is constantly changing, and investors must remain flexible to meet the Realtor continuing education demands of tenants. New machinery, fixtures, and residential development affect demand, so it is important to monitor changes.
Listed REITs are investment funds that invest in real estate properties. These companies pay out a large portion of their profits as dividends to their shareholders. They must also raise cash in the form of new stock or bonds before they can buy more real estate. This can cause them to be less flexible and may have limited liquidity. There are also non-traded REITs that are only available to accredited investors. Non-traded REITs often charge higher fees than listed REITs.
Rexford REIT has had a stellar March quarter performance. The company increased core FFO per share by 29.7% year-over-year, and portfolio occupancy was 99.3%. Its portfolio includes 312 properties and 38.1 million square feet of leasable space. In addition, the company acquired 17 new properties during the quarter. This impressive performance led to the company increasing its 2022 guidance. This move came after it rewarded investors with a 31% dividend hike earlier this year.
Property management firms
The role of property management firms in real estate is to maintain a portfolio of properties and oversee their overall upkeep. They handle a diverse range of tasks ranging from tenant management to property maintenance, and work to keep expenses to a minimum. Their services also include rent collection and budgeting, as well as 24-hour emergency service.
Property management fees vary, but in general, property managers charge between 8% and 12% of rental revenue. When signing a contract, make sure to ask whether the fee is calculated on rent collected or the amount of rent that is owed. It’s better to pay for rent collected rather than rent that is past due. Also, ask about how vacant units are handled in the contract.