Investing in Knoxville, TN? What Property Type Should You Buy
One of the most popular and oldest asset classes is real estate. Most new investors in real estate already know this, but most do not realize there are several different kinds of properties one can consider investing in Knoxville, TN.
As you learn more about the different types of real estate investments, you will likely come across someone who built a fortune by specializing in a particular area.
If you are considering investing in real estate, here are four types to consider:
4 Property Types You Should Consider Investing in Knoxville, TN
1. Residential Property
Single-family homes, condominiums, and vacation homes are some of the residential housing trends in Knoxville, TN. Property investors make money by collecting rent from property tenants, through the appreciation their properties accrue, or through both.
Residential real estate investing can take many forms. The process can be as simple as renting a spare room or as complex as purchasing and flipping houses for a profit.
2. Commercial Property
Office buildings and skyscrapers are the most common types of commercial real estate. You could take some of your savings and build a small building with individual offices that you can rent out to small businesses and companies.
Multi-year leases are not uncommon in commercial real estate. Cash flow from rentals can be more stable and even protect owners when rental rates drop. Markets fluctuate, and rental rates could increase substantially over a short period. Rates may be difficult to raise if an older contract is binding on the commercial property.
3. Industrial Property
Real estate that accommodates industrial-sized activity is known as industrial property. These operations include production, warehousing, manufacturing, research, and distribution of commodities and products.
Industrial property investment can often generate significant fees and revenue streams, such as coin-operated vacuum cleaners at a car wash, allowing the owner to maximize their return on investment.
4. Raw Land
The process of purchasing land for development requires a good deal of market research, especially if you intend to develop the property yourself. Investments of this type are best suited to someone with a large amount of capital and a thorough understanding of all things real estate, in addition to a strong understanding of the local rental market.
With the world’s population growing, housing and other real estate properties remain in high demand. When investing in traditional real estate, like residential or commercial properties, you should do your due diligence beyond just saving up for the down payment. Understanding your local market is crucial.
If demand for commercial and residential space in your area is little or property values begin to drop, that investment could quickly become a burden.
Ready to invest in your next residential property in Knoxville? Reach out to a local REALTOR® today.
