Methods of investing in real estate

This overview is a guide to the Banking & Finance content within the Methods of investing in real estate subtopic, with links to the appropriate materials.

What are the key methods of investing in real estate?

The term ‘real estate finance’ can cover a variety of types of transaction, including what is considered to be traditional real estate finance, whereby a lender or group of lenders provides a loan to a borrower to assist the borrower with:

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purchasing a property or portfolio of properties, and/or
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developing a property or group of properties

A loan structure is by far the most commonly used method of investing in real estate. However, other less common structures such as Islamic finance and residential and commercial mortgage-backed securitisations can also be used as a financing technique for real estate finance.

Other real estate investment structures include:

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sale and leaseback
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real estate investment trusts (REITs), and
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property derivatives

Traditional real estate finance—the lending structure

Real estate finance in the form of lending against the cash flow generated by a property is thought of as

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