Real Estate Investment

Real estate investments is an investment field that involves buying real estate with the intent of improving it in some way so as to increase its market value and hence profits. It is not uncommon to see real estate investments referred to as residential real estate investment, commercial real estate investment, and industrial real estate investment. Real estate investment essentially involves the buying, holding, and/or selling of real estate as a part of an investment plan. Development of real estate as a part of an overall real estate investment plan is usually thought of as a sub-specialty of real estate investment known as real estate development. Developing real estate requires considerable financial resources and also considerable time, and usually precludes the investor from using some of the other more practical investment tools such as derivatives instruments, financial spread betting, and other such tools.

Residential real estate investment is the most popular type of real estate investment. This includes properties that are bought and resold on the open market as well as those that are still being constructed. Properties that are being developed are ones that are still being built and yet have a market value which can be increased with renovations or repairs. Other types of residential real estate investment include those that involve the buying and selling of foreclosed homes.

Commercial real estate investment deals more with making an investment in a physical asset. Examples of physical assets include properties which are leased by the owner to a tenant, land or site cleared for development, buildings bought for reconstruction, and land purchased for development. In this kind of real estate investment, the value of the physical asset is used as collateral for a loan. The value of the collateral is usually determined by the financial condition of the borrower. Some of the best examples of this type of real estate investment are commercial real estate investments like real estate owned property, tenant-landlord relationships, and vacant land or sites. There are also opportunities for real estate investors to buy low and sell high like stocks.