A Brief Guide To Real Estate Investment Types

Investing in real estate has long been a trusted method for growing wealth and diversifying an investment portfolio. For investors new to this space—or those seeking to expand their current knowledge—understanding the different types of real estate investments is key to unlocking informed and profitable decisions. This guide provides a concise overview of the most common types of real estate investments and how they will work for you.

Residential Properties  

Residential properties are the foundation of real estate investment for many investors. These include single-family homes, duplexes, and apartment buildings that are rented out to tenants. Investors often prefer these properties because of consistent demand, especially in growing urban populations.  

Successful investors in residential real estate focus on location. A house in a neighborhood with access to good schools, transportation, and amenities typically attracts reliable tenants and higher rental income. 

Commercial Properties  

Commercial properties cater to business needs and often involve office spaces, retail stores, and industrial buildings. What sets this type of investment apart is the longer lease agreements, which provide more stability compared to residential investments.  

However, commercial real estate requires a deeper understanding of market trends. For instance, the demand for flexible office spaces has increased significantly in recent years, driven by hybrid work environments. Smart investors analyze these shifting dynamics and look for opportunities in underserved segments of the market.  

Land Investment  

Investing in land offers a unique approach that doesn’t involve tenants or buildings. Raw land appreciates over time, particularly in areas with future development potential. For example, buying plots near expanding suburbs or areas earmarked for major infrastructure projects can lead to significant returns.  

That said, land investment comes with risks. Zoning laws, soil quality, and access to utilities are critical factors to evaluate. To mitigate risks, investors often conduct thorough due diligence before acquiring a plot of land.  

Fix and Flip Properties  

Popularized by TV shows and glossy Instagram feeds, house flipping involves purchasing undervalued properties, renovating them, and selling for a profit. The appeal of this investment type lies in its short turnaround time, often yielding quick profit margins.  

However, entering the fix-and-flip market requires both skills and research. Investors who succeed in this space usually partner with reliable contractors, understand renovation costs, and study local markets to make sure the flipped property will appeal to buyers.  

Tips for Smart Real Estate Investing  

Regardless of your plans, some real estate investment best practices remain universal. First, understanding the market dynamics of your chosen region is essential. Real estate markets are highly localized, and knowing neighborhood trends will give you a competitive edge.  

Second, assessing the financial risks and rewards is crucial. Calculate expected cash flow, potential returns, and investment expenses to make sure you’re making informed decisions. Finally, maintaining a long-term perspective often leads to better decisions, whether you’re flipping houses or purchasing commercial units.  

Real estate offers a variety of investment opportunities, each tailored to different goals and levels of involvement. Whether you’re drawn to steady income from residential rentals or intrigued by the potential of land, understanding these categories will align your strategy with your financial targets. 

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Real estate is a long game, sometimes renovations need to be, too

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By Louise Phillips Forbes, Brown Harris Stevens

In today’s real estate market, the perfect property isn’t always move-in ready. 

Buyers who are able to recognize short-term opportunities and long-term potential will understand that the true value of a property often lies beneath its current condition. The key is to look beyond immediate challenges and focus on the long-term rewards. 

When taking on a renovation, it is important to differentiate between and then prioritize the must-dos and the would-be-nice-to-dos. Deciding this early on—and sticking with the plan—helps ensure that work is done efficiently and within budget, while still keeping an eye on the bigger picture. 

I experienced this firsthand in 1993 when I toured an apartment with a client. The property needed, well, everything, and the project was much more than my clients would consider taking on. But I saw a diamond in the rough. At the time, I was relatively new to New York City, single, and eager to establish roots in the city that I had quickly fallen in love with. 

Purchasing the apartment was the greatest gift I could have ever given myself—it was a testament to my independence and tangible recognition of my own self-worth. I staged the renovation over the course of several years, with each item checked off the list reinforcing the rewards of patience, perseverance, and sweat equity. The apartment not only became my home, but it also became the foundation for my future. Years later, I met my husband, and as our family grew, we were fortunate enough to purchase the apartment upstairs, allowing us to expand and reimagine our space.

Whether you’re planning to complete the work all at once or tackle it in stages, it’s important to carefully select the right professionals—an architect, a general contractor, or a real estate agent—who share your vision and can help make sense of the moving pieces. 

It is also important to consider the cause and effect of factors like the cost of labor and materials that can change over time and how shifting construction codes, building policies, and governmental actions can impact the overall scope. For example, in 2019, I helped a client renovate a 2,700 square foot investment property for a cost of $430,000. Fast forward to this fall, the client completed the same exact renovation for $815,000.

Renovating a home can be incredibly rewarding, but it requires careful planning, strategic decision-making, and the ability to adapt to an ever-changing market. With the right mindset and the right team of professionals, a property that may appear to be a fixer-upper today can evolve into the home of your dreams tomorrow.

Louise Phillips Forbes is a top producing agent at Brown Harris Stevens and a 34-year industry leader with nearly $6 billion in sales and a list of awards to her credit.

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Eileen Foy Joins Compass from Douglas Elliman

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Eileen Foy

Compass, Inc. (NYSE: COMP) ("Compass" or "the Company"), a leading tech-enabled real estate services company that includes the largest residential real estate brokerage in the United States by sales volume, announces that Eileen Foy, formerly from Douglas Elliman, joined Compass with her team of three. Throughout Eileen’s 30 years of sales experience where she amassed an estimated $1B in lifetime sales volume, she has been the recipient of numerous awards such as the Pinnacle Award at Douglas Elliman from 2014-2023, the Legend Award at Douglas Elliman, and recognized as amongst Wall Street Journal’s Top 250 Agents in America.

“I am grateful for the experience I’ve had at Douglas Elliman and the support I received during my time there,” said Foy. “However, after recognizing how intuitive and innovative Compass’ technology is, I felt that in order to serve our clients best, it was time to make the switch. This decision is all about ensuring we continue to provide the best possible service for both our clients and myself.”

The Eileen Foy Team, made up of two additional members alongside Eileen, will continue to serve a diverse range of clients, focusing on the Upper East Side, Midtown, Chelsea, the West Village, and the Upper West Side. The team prides itself on its versatility, comfortably assisting everyone from first-time buyers to those seeking pied-á-terres or purchasing a prized townhouse or penthouse.

“Eileen's dedication to her clients is unparalleled, and she understands how emotional the home-buying process can be,” said Tristate Vice President Gordon Golub. “With Compass' technology and specifically with Compass One, we're excited that she’ll be able to spend even more time focusing on what matters most to her clients."

Before Foy became the award-winning Manhattan broker she is, achieving accolades such as one of Real Trends’ Best Real Estate Agents in America from 2014-2023, she established her real estate career in Southampton. Notably, Foy repped the purchaser for the sale of the Zaha Hadid penthouse at 520 West 28th Street for $20.2M and a record breaking sale at 50 Charles Street 14A at $15M.

Currently, Foy has 20 active listings available through Compass, spanning from the Upper East Side to the Upper West side. 

Foy joins on the heels of Compass recently announcing Compass One, the only platform designed to connect the client and agent through every phase of their real estate journey and experience, 24/7 transparency before, during, and after the transaction

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