Real Estate can also be called “real property”. This is basically a land with any permanent improvements affiliated to the land (natural or man-made).Including water ,minerals,homes,fences,bridges, tree.
This is indeed different to what they refer as personal property mainly because it isn’t attached to the land. Examples are vehicles, boats, jewelry furniture.
Real Estate has five main categories:
- Raw land – undeveloped property , agricultural land, vacant land
- Commercial – any property used mainly and exclusively for business purposes like gas stations , grocery stores, hotels ,supermarkets etc.
- Industrial – any property used for production , distribution, storage , research and development like factories and power plants
- Residential -any property used for residential like condos, family homes, town houses etc
- Special use – any property used by the public like cemeteries, schools, parks
People tend to be confused about the terms land, real estate and real property.
Land – this is an earth surface which has trees, minerals and water.
Real Estate – is a land with any permanent man-made infrastructure .
Real Property – is the benefit, rights and interest inherited in the ownership of real estate.
To be more specific, real estate includes the surface of the land and everything above or below it so as what is attached to it with the rights of what we call ownership like right to posses , lease , sell and literally enjoy it !
There are numerous ways to invest in real estate. These are the popular:
- House flipping- also known as Wholesale real estate investing. A strategy in which an investor buys a property yet will not use it but sell. It’s like the investor bought it with a low price and will sell it on a high price to gain profit.
- Rental properties-from the word itself, rental means dwelling as a residence.
- Homeownership- it is a situation of owning one’s house
If you buy tangible property you can make money in two ways :
– Revenue from rent or leases
– Appreciation of the real estate’s value
Real estate’s key to success lies in its location.
Pros:
– Can be bought with leverage
– Offers steady income
– Offers capital appreciation
– Diversifies portfolio
Cons:
– Difficult to liquidate
– Requires big initial capital outlay
– Influenced by highly local factors
– May require active managements and expertise