Exploring Real Estate Investments That Offer Income Generation Along With Capital Appreciation

Exploring Real Estate Investments That Offer Income Generation Along With Capital Appreciation

On a broad basis, there are two types of real estate investments to choose from, one is income generating real estate and the other is where you only make money through value appreciation. The only thing they have in common is that both are tangible assets. When you are considering making investments in real estate the most important factors to look at are the type of property and its location. Well, an average investor mostly looks at a home as his potential investment, but there are many other real estate investment options such as offices, warehouses, retail spaces in shopping malls and so on.

Now, you must know that all these different types of real estate investments don’t have to perform in tandem with each other. Also, if a certain type of property has performed better in the past, it simply doesn’t mean that it will continue to do so.

We can further classify income generating real estate into industrial, rental residential, retail, hotels, parking lots, offices and many less common ones too. As far as value appreciation based real estate investments are concerned we can include vacation properties, houses and even vacant commercial property that you nimble on for pure capital appreciation.

Now, let’s dig out the most sought after real estate investments from the above mentioned names.

At the Heart of the Market Office Property

Considered as the finest form of real estate investment among an elite class of buyers, office properties are usually located in the most sought-after parts of a market. It’s the hub for “white-collar” jobs, so the demand trend is usually sensitive to corporate sector performance. This is the most volatile part of the real estate market, so the small players usually stay away. The returns from this space are largely attributed to rental demand with compliance to conveyancing solicitors melbourne, which stays solid in times of economic prosperity. However, high maintenance costs can put a drag on your returns if it goes vacant for a long time due to a slowdown in general business activity.

Retail Property: A Defensive play in the real estate market

You can find all kinds of retail properties, ranging from the traditional one tenant property to modern shopping malls. Usually, the pricing and rentals of retail properties depend on the footfall. If you have a key player on the same property such as the like of Mc Donald or Wal-Mart, both the pricing and rentals are likely to enjoy a sharp premium to average prices. Some other factors that influence the demand for such properties include demographics of the area along with income levels. You should consider watching retail sales growth to determine the trend in place for such real estate. These are considered defensive as retail leases are usually longer than office leases, and retailers are less likely to relocate in any scenario.

Residential Property: For stable rental returns

Residential properties especially multi-family accommodations are a reliable source of stable rental income over the long term. Trend for residential properties usually stays consistent irrespective of macro economic conditions as people always need a place to live. Even you lose a tenant and an accommodation goes vacant for a while, it won’t have a heavy impact on your returns.


When it comes to leases, operating expenses are usually passed on to the tenants, but that may not be the case with residential real estate where any kind of increase in operating costs will be borne by the owner. The best part about residential properties is that in many countries you can seek government insured financing, which brings down your mortgage rates, and you are able to generate higher returns.

There are various factors that influence the demand for properties like the location is chosen according to the income levels. Multifamily accommodations are a good source of rental income over a long time because people always need a place to live in, hence property is a promising investment.