How Many Different Types Of Properties Are There?

How Many Different Types Of Properties Are There?

by

Melissa Gifford

If you want to become a real estate investor or even if you are just looking for some information about selling your home it helps to know the different types of real estate properties on the market. There are five different types: residential, industrial, agricultural, commercial, and special-purpose.

Residential

This is the type of property that most home buyers will be dealing with. Residential properties are the ones that serves as homes for people to live in. It does not matter if it is a detached house, a duplex, or a multi-family home. All of these types are considered residential. They can be in urban areas, suburbs, or in rural areas. Please note that property laws may zone a building one way even if the lender disagrees. As an example, a multi-family home or a apartment complex are seen as commercial property and are not eligible for residential home loans.

Commercial Properties

Even if a home buyer does not deal with commercial real estate everyone is familiar with commercial properties. A commercial property is one where business or commerce takes place. Examples would be parking facilities, malls, stores and shops, hotels, entertainment venues, or any form of market. Commercial Properties property has a different set of criteria for interested buyers, since they deal with businesses zoning, parking, tax rates, and traffic flows become much more important than just the building itself. Entrepreneurs and investors often consider commercial properties and would have knowledge or ideas of how to expand on the value of existing properties. Some companies that buy homes will convert houses into commercial properties for this purpose.

Industrial Property

This property can easily be confused for commercial property, especially since it typically has commercial use. In fact, as long as it follows industrial zoning codes, a commercial property can be set up in an industrial area. However, industrial property itself is set apart to include factories, warehouses, power plants, and other high utility buildings that don\’t necessarily see a lot of foot traffic. The primary difference is that commercial properties are where goods are sold, whereas industrial properties the goods are manufactured or supplied.

Agricultural Property

Agricultural Property property is pretty straightforward to designate and understand conceptually. It is land that is primarily used for agriculture. Most people would think of just farms, but ranches are also included as agricultural. More abstract agricultural uses are orchards, certain types of swamp, or forests being grown for timberlands. Specific knowledge is definitely a must with this type of land, as not all crops, products, or livestock can be grown in all areas. Even if something were grown there in the past, knowledge of the depletion of nutrients must also be considered.

Special Use Property

This type of property is not out of the purview of a real estate investor but most investors will not usually deal with them. Part of what makes it a special purpose properties is that the property is only intended to be used for one thing or for very limited use. It doesn\’t just mean the land but also the building on the land, if a building cannot be converted to another type without a large investment of time and money. Because of this these types of properties only have a very limited pool of buyers and are not what you want for a quick property sale.

Special purpose properties include churches, cemeteries, schools, or government held lands.

This has hopefully helped to explain the differences between the different types of property. This can help you make an informed purchase and ensure that you know what type of property you are looking at. Make sure that whoever you are using as the agent is knowledgeable about the type of property you are considering buying along with any zoning laws that might be involved with buying the property.

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