Real estate is regarded as a bundle of rights which an holder can exercise and benefits from. It is regarded as real because of its nature, being fixed and immobile. An investment in real estate or property thus is aimed at long term benefits which the investor is expected to derive as a result of its ownership. Thus, the major yardstick of measuring real estate investment is the return on investment which usually is in form of rent (or profit – when it is used as business). In another form, real estate has the ability for capital appreciation overtime, when it is held for re-sale purpose.
Investment in real estate often requires a large capital outlay, which with the right enterpreneurial ingenuity can attract adequate return. Added to this is the long gestation period which the investment will take to pay-back the capital. However, real estate has been identified as a very reliable investment avenue compared to other investments such as stocks, securities, etc. Unlike other investment media, real estate confer special status that may not be available to other investors in term of social prestige in addition to the financial returns. Hence, an investor in real estate apart from enjoying regular income from the investment, has a social status that money may not be able to guarantee. In other words, the decision to invest in real estate could be economic, social prestige or political. This therefore addresses why different property investment exist base on various objectives.
Types Of Real Estate Investments
Investment in real estate takes different forms, and each of the forms or category has various objectives of the relevant investors. The major ones are:
Residential Property Investment
This is an investment that is developed to serve as shelter for human habitation. It comprises of housing units of different types serving different family needs. Investment in residential properties could be for owner occupation (social prestige) or annual returns in form of rent. Residential property investment are in different categories, namely;
Bungalow – this is a single family accommodation built on a single floor. It is further identified by the number of bedrooms which is used to meet the different family needs bases on size. Hence, we may refers to Two-bedroom, Three-bedroom or Four-bedrooms Bungalows. Most investor for social prestige, especially the medium income prefer this type of property for personal occupation. As an investment property, bungalow has good demand especially for middle and high income earners because of its privacy.
Block Of Flats – this is an apartment building which accommodate (usually) more than one family units. It could be single or multiple floors with share common external facilities (e.g. staircase, parking, security, etc). Like Bungalows, flats are also identified by the number of bedrooms in each of the family units. The return on this type of property is good due to high demand in the market.
Duplex – The duplex,which means double of two-fold, is a type of single family storey building that can be found together as a housing unit on two floors. It could be detached (alone) or semi-detached (sharing compound with another unit).it is usually designed with internal stairway. Duplex is regarded as a low density residential unit which is for high income earners. As such, they are usually designed with state of the art facilities to show the class of the occupants. Demand for this type of properties is among the high class and they are usually not as many as flats and bungalows, but with high rental income. It is also a higher social status for the property owners.
Terrace Houses: These are row of houses sharing walls and premises. They could be on one or two floors. The demand for this property investment is also good especially in highbrow neighbourhood.
Mansions: Mansions are special type of multi apartment units contained in a single building. It is a large impressive house with state of the art facilities serving a family or an entity. A mansion could have several rooms and other complementary faciliities within the large premises. It is usually contained of main building and other service facilities such as guest chalet, servants quarters, service areas (e.g. security building, generator house, conference hall, swimming pool, lawn tennis court, etc). It is occupied by the highly placed personalities in the society and has few demand. While mostly developed for owner occupation, there are few in the market for income yielding.
Commercial Property Investment
Commercial properties are developed for business purposes. It consist of buildings used for offices, shops, warehouses, etc.
Offices – offices are usually developed to provide conducive environment for secretarial and other related functions and meetings. It is usually designed to have safe environment for work and business transactions. Offices may be designed as open plan or partitioned into smaller units; single or multiple floors (high rise); single or multiple occupation; owner occupation or leased out (single or multi-tenanted), etc. Usually investment in offices take consideration of space for adequate parking, security of properties and lives, and location in terms of accessibility to other business environments. Demand for offices is good especially in cities and commercial centres and returns therefore is encouraging.
Shops – This type of property provides accommodation for buying and selling (trading) of different forms. It ranges from market stalls, shopping malls/complexes to trade fairs complexes. Shopping environment are usually developed with adequate parking and security for customers. Generally,investment in shops have good return but location is very important to ease of accessibility.
Warehouse – This is a special type of commercial property investment used for storage facilities. It usually service other business concerns such as industries, shops, offices, etc. It requires good access for ingress and egress of heavy duty vehicles that are used to transport goods. The demand for this property.
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