Characteristics of Real Estate
Real estate is property comprised of the actual buildings and land on it, and its accompanying natural resources like water, plants or minerals; immovable property of that sort; an obligation to pay for the use of the thing, buildings or house in exchange for something else. It may also be called the “money tree” because of the many lucrative profits it offers. Real estate investments can be made out of virtually any existing structure, whether it is an apartment building, a row of houses on a piece of land or a row of cars on a lot. The possibilities are endless. Real estate investments vary greatly depending on the amount of money you’re willing to put into them, and the laws governing the transfer of title from one person to another. It may be wise to seek the counsel of an attorney who specializes in real estate before diving into this field.
Real estate investing usually involves purchasing residential buildings and turning them into residential properties, which are sold and rented by others. This can be done either by buying up an old piece of property that has a viable market value, or by purchasing vacant land where there’s already a structure. The money you’ll invest will go a long way toward establishing a steady income, since the land itself along with the houses, apartments, and other buildings you buy will almost always have some sort of marketable value. The more income you create, the larger your bank account will grow, which allows you to purchase more real estate and create even more income. Another great thing about investing in real estate is that almost everything is within easy reach from your location. From shopping malls and office buildings to country clubs and golf courses, you can find almost everything you need right where you live.
There are two main types of residential real estate investment: the “builder-owner” type and the “seasoned investor.” Builders are the ones who buy large lots of dirt and haul it to the construction site. They can build single family residences or condos, and they’re usually the ones who are financially strongest because they’ve built so many homes. Seasoned investors tend to buy foreclosed homes, which they often fix up and resell for a profit.
Regardless of which type of investor you are, both types of real estate investing have their own main categories of products and industries to choose from. One category of real estate investing is commercial real estate, which includes apartment complexes and office buildings, retail properties, warehouses, and even vacant land. The main industries of this category are retail sales and leasing, industrial cleaning and manufacturing, and development and maintenance. These businesses tend to be temporary and require the sale of a lot of property rather than holding onto a property for years on end.
The other main category of real estate investing is land speculation. This includes constructing homes on vacant land, building roads, and constructing sewer systems on private land. Sometime investors buy land that already has all the amenities and infrastructure already in place. Other times they will buy land that has the infrastructure already in place but needs some additional work such as a sewer system. In either case, they’ll buy the land, pay for the construction, and make money from it for years to come.
There are several other sub-categories of real estate, but these two are the most popular and profitable. Other real estate types include land ownership, land speculation, residential homes, commercial property, and industrial property. A well-planned investment will allow investors to make money for many years to come, even decades. All you need to do is choose the type of business you want to operate from your real estate investment properties. Once you have educated yourself in the various economic characteristics of the real estate market you’ll be on your way to success!