Five Maxims of Real Estate
Real Estate encompasses land and any buildings on it, as well as the air above it and the underground rights below. It also includes the businesses that design, finance, build, manage and market land, infrastructure and buildings. Business real estate, on the other hand, refers to the buildings and sites where an organization operates. The choice of locations, property types and financing methods can help or hinder a company’s strategy, raise or lower its costs, and promote or hamper productivity.
The value of real estate is a leading indicator of the health of an economy. The value of residential and commercial properties rises or falls along with interest rates, employment levels, population growth, crime rates, educational systems, transportation facilities and municipal services. Real estate is also a major source of income for individuals, who make money from investments in rental and investment properties, and from home improvements and flipping.
A growing number of organizations have moved away from in-house real estate departments and are outsourcing their real estate services to professional firms. These firms are gaining a reputation for expertise in a wide range of real estate issues, and they have made headway in standardizing procedures and improving service. They have also developed relationships with local governments and communities, making them better informed about regulatory and environmental issues.
In addition to providing the expertise and resources that companies need, these firms are reducing risk for their clients. They can use their knowledge of local markets to advise businesses on how to structure their operations and to avoid potential environmental problems. They can also help companies find sites and negotiate leases that meet the latest regulatory requirements.
The real estate industry is undergoing a significant shift from cyclical to sustainable practices. Companies are becoming more concerned about the environmental impact of their real estate, and they are increasingly seeking energy-efficient building materials and practices. They are also implementing new strategies to increase productivity and reduce costs.
Real estate is a highly complex, fast-moving industry. As technologies, incomes and buying habits change, the real estate industry must keep up with these changes in order to stay relevant. The following five real estate maxims can help guide the industry as it moves forward.
Often, a large upfront price tag is associated with real estate investments, which can deter some investors. To address this issue, some investors choose to partner with others when purchasing a property, a practice known as real estate syndication. This allows multiple investors to share the initial capital required for a purchase and share the profits. The main players in a real estate syndicate are the syndicor (general partner) and passive investors.
The type of real estate you invest in will dictate your exit strategy. For example, if you want to sell your investments quickly, then you might choose to focus on house flipping. Alternatively, you might prefer to buy and hold your properties for long-term cash flow. To do this, you might choose to focus on rehabbing or wholesaling.