When Real Estate Investing, location is not the only factor that affects performance. This is because several other factors determine the performance of a property and these factors are not the same as one another.
In this discussion, we will try to explain several types of property investment and what factors will affect their performance.
1. Office Property
Lots of property entrepreneurs make major investments in office buildings. This is because office properties can generate the greatest profit compared to other types of property. Also, a strategic location and being in the business center is one of the driving factors why this type of property is so profitable.
2. Property functioned for retail and trade
There are various types of property for retail and trade, for example, shopping centers/malls and shophouses that are strategically located on the main road. The amount of demand for retail property is influenced by several factors, namely location, population density, income levels of residents, and population growth. From an economic perspective, retail property performs best in developing countries, especially when retail sales growth is high.
The advantage that you will get from the retail property is that the rate of return is more stable compared to office buildings.
3. Property for Industry or Manufacturing
Investing in industrial property usually requires lower operating costs compared to the office building and retail properties. There are various kinds of investments that can be made, starting from warehousing, manufacturing, company research and development sites, and also distribution locations.
Some of the important factors to consider when investing in this type of property are ceiling height, location close to major transportation such as rail or sea jetty, and more.
4. Property for Family Residence
The last type of real estate investment is family residential property. This type of investment gives the most stable results because whatever the current economic condition, people will always need a place to live. Thus, in a normal market, occupancy rates will remain high and be able to provide stable income.
Types of family residential properties have operating costs that can be shared between the owner and the tenant. This depends on the agreement when the lease agreement is made between the two parties.
However, if you do not make the above agreement, it means that any risk of increasing building operating costs will be borne by the owner during the lease period.
All types of property that we have mentioned above are types of properties that can provide regular rental income to their owners.
This income comes from the rental income that the tenant pays to you as the owner of the building.
You can consider several factors and the costs involved in choosing the most suitable type of property.
However, if you are currently unable to invest in the property sector, there are other, more profitable ways you can do this. The trick is that you can invest in low-cost investment instruments to start with.