| The different types of investment properties that real | | | | property. |
| estate investors consider vary in many different ways. | | | | A corporation is considered an artificial person. It is a |
| We'll identify the different types in this article and briefly | | | | separate legal entity. The corporation conducts its |
| discuss each one. We'll also discuss the different | | | | business according to the state law where the entity |
| ownership structures available. The basic types of | | | | was created. The key here is "separate legal entity". |
| investment properties include retail, office, apartment, | | | | Due to the fact that the corporation is considered an |
| mixed developments, and hotel/motels. | | | | artificial person, the real property is considered to be |
| Retail properties include freestanding buildings and | | | | owned by one person, the corporation. |
| shopping centers. A freestanding building is one where | | | | The management of the corporation depends on its |
| it stands alone, not connected to any others. Shopping | | | | board of directors which are elected by shareholders. |
| centers range from strip malls to super regional malls | | | | The important point here is that any person who |
| with many stores located in one area. | | | | wishes to form a corporation and purchase real estate |
| Office properties can be small (one, two or three | | | | must speak to an attorney about managing the |
| tenants), office parks where many building exist | | | | corporation appropriately, so that it operates the |
| serving different businesses or high rise complexes | | | | corporation according to state and federal law (if |
| where many tenants are located in one building. Most | | | | applicable). |
| will be located in downtown urban areas or in or near | | | | Another business entity that is becoming more popular |
| suburban towns/developments. | | | | is the Limited Liability Company. This business entity |
| Apartments range from multifamily homes or | | | | takes advantage of the same type of liability |
| "mother-daughters" to commercial units. A commercial | | | | protections as a corporation, however, it differs from |
| apartment building will consist of at least 5 units. The | | | | the corporation in that it takes full advantage of the |
| larger the apartment complex, the higher the need for | | | | federal tax benefits and flexibility of a partnership. |
| on-site management of the property. | | | | Again, check with your attorney in order to take full |
| Mixed developments consist of a combination of | | | | advantage of the benefits of this "pass-through" entity. |
| residential apartments, houses, and condos with office | | | | Ownership of real property is also different and |
| space and retail stores. Many communities that are | | | | consulting an attorney to discuss how the LLC takes |
| growing at a fast pace have developers who are | | | | ownership of property is wise. |
| maximizing the feeling of community by mixing all | | | | Some of the other entities include real estate |
| different types of structures, creating small | | | | investment syndicates, both private and public |
| neighbhorhoods with all the essential aspects of small | | | | organized into a corporation, limited liability company, |
| town, such as restaurants, entertainment, jobs for the | | | | general partnership or limited partnership. Syndicates |
| local public, and of course, shopping. | | | | usually involve one or more projects and different |
| Hotels and motels require excellent management if | | | | types of ownership (tenancy in common, joint tenancy, |
| they are to be successful. Their locations near airports, | | | | etc.). |
| business parks, inner cities and other active areas help | | | | In conclusion, it's very important that the new investor |
| to keep their doors open. Their failure rate is relatively | | | | has, at the very least, a basic understanding of the |
| high and must be managed correctly in order to remain | | | | different types of investment properties and |
| in business. | | | | ownership. It's often something that is overlooked by |
| These are the basic types of investment properties. | | | | new investors due to the complex nature of learning |
| The single family home is of course a consideration as | | | | the business of investing, however, without at least |
| well as other types of investments, however the | | | | consulting an attorney and doing some reading, the |
| properties featured in this article are appealing due to | | | | new real estate investor is bound to make costly |
| their income potential. | | | | mistakes that are definitely avoidable. It's a great thing |
| There are several different types of ownership and | | | | to learn from mistakes, however, making stupid |
| ownership structures. These are usually referred to as | | | | mistakes like avoiding education due to a lack of |
| business entities in which investors hold real property. | | | | patience is just plain old dumb! |
| To keep things simple, we'll simply cover the very | | | | ©2007 noobdogs. |
| basics of each structure and how each owns | | | | |