Kristi High | Real Estate Investment Categories

 

Real Estate Investment Categories

The seven primary real estate types—residential, office, industrial-warehouse, hospitality, retail, agricultural, and the remaining, catch-all category of "special"—are quickly understood by investors of all sizes.

According to Kristi High, Several distinct property forms have evolved to satisfy human needs and desires, mostly as a result of market forces, however, in the modern day, zoning and government regulations frequently influence the actual location and scope of property development.

Certain real estate patterns, such as the concentration of housing and services close to city centers, which naturally tends to drive manufacturing and farming further out along urban peripheries, have been observed repeatedly throughout history, according to urban academics. Actually, "fast food" stands selling hot food along city streets can be found in the preserved remains of Pompeii from the year 79 AD.

Office Merchandise

Kristi High said Office districts, historically speaking, are a relatively recent concept, predating, for instance, agricultural, industrial, retail, and residential purposes.

Of course, in the US and around the world, downtown, high-rise business areas are symbols of contemporary trade. Property investors, especially institutional ones, have flocked to skyscrapers because they can rent to prestigious tenants like credit-worthy blue-chip companies.

It's interesting to note that the Great Chicago Fire of 1871, which destroyed most of the city, gave rise to the idea of the modern office district. The office district was quickly established as more structures were constructed better, higher, and followed regulations.

Industrial-Warehouse

Kristi High claims Due to globalization and the shipping requirements of modern metropolitan megalopolises, the warehouse-industrial sector, which was once a lowly property class and frequently an afterthought among investors, has recently become a hot ticket.

Granaries, stored close to or on farms, or next to homes and pubs in villages, were the first kind of storage facilities.

Beginning in the 15th to the 19th centuries, when Europeans first began transoceanic trading, warehouses were quickly needed along ports to hold goods while they awaited payment or until inland transit could be arranged. It was desirable to swiftly load or unload cargo at ship docks, therefore neighboring warehouses were essential.

Those Markets Are Residential

Kristi High says Residential real estate, which is possibly the second-oldest type after agricultural real estate, is still primarily a market for owner-users or smaller investors, though institutional investors have recently grown more and more interested in single-family detached homes and undoubtedly the multifamily building or apartment sector.

Ten stories and up are considered high-rises in the world of apartments, and because of the high cost of construction, these buildings are typically upper-class strongholds from the start. In general, steel construction rather than wood becomes the standard if buildings rise above five stories, coupled with other higher inherent expenditures like elevators and wider stairwells, and even opulent underground parking garages.

Lodging-Hospitality

Kristi High claims Temporary lodging has been needed since man first began to travel; it was first offered along ancient trade routes or close to sacred places of worship, and it is now a thriving industry in today's major cities.

Hotels have shown to be no fly-by-night enterprise through dramatic ups and downs: The Nishiyama Onsen Keiunkan, a Japanese resort not far from Mount Fuji, has been in operation since the year 705 and is thought to be the oldest operational hotel in the world.

Investors today frequently categorize hotels as luxury, full-service, limited service, flagged versus unflagged (that is, whether or not they are part of a name-brand chain), boutique (typically a higher-end or distinctive facility), or extended stay (usually for business travelers on assignment).

Types of Special Properties

Kristi High said Investors typically group five other property types—theatre, parking, religious, recreational, and medical facilities—under the catch-all special category.

Data centers are an example of a novel property category that occasionally results from human commerce or traditions but does not fully fit into the wide categories that are typically used.

Data centers have grown to be a popular investment, especially for private equity investors and some REITS. They are neither warehousing nor manufacturing nor are they offices.

Why Make a Real Estate Investment?

As per Kristi High, There is little that can compete with carefully chosen real estate for investors seeking stability, income, and appreciation. Certainly, there is risk involved in every endeavor, business, and real estate transaction.

The sovereign bonds of powerful countries like Germany or the US offer an option for people who are fully risk-averse and seeking income, however, the returns are frequently modest or even below the rate of inflation. Bonds with lower rankings, such as corporate bonds evaluated by a credit rating agency, might have higher yields but also more risks.