Understanding the Real Estate Industry
Real estate today is one of the fastest growing sectors in the United States economy, and is responsible for many of the economic problems that the country is facing today. In fact, it is the largest and most liquid market in the country. Real estate investment is the process of purchasing property that will generate income. It is a very lucrative market and there are many opportunities for investors. This article will discuss the importance of real estate for a new investor.
Real estate is real property consisting of the structures and land on it, and its accompanying natural resources like water, minerals or crops; and its accompanying contractual rights, such as master rights, right of first refusal, lien or mortgage. It also covers real estate owned by foreigners, like apartment complexes, commercial properties, industrial lands, vacant land, and undeveloped land. Real estate investment occurs when an investor buys a piece of land with the intent to construct a building, or to develop residential or commercial real estate and makes improvements to the existing property. Real estate investment is a method of investing money into real estate with the intention of making money from the rental value of that property.
The two major categories of real estate are “asset-based” and “intra-asset-based”. Asset-based real estate deals with land, buildings, and land improvements that create a financial gain without the need to own the actual property. These include vacant land, residential or commercial buildings, undeveloped lands, residential or commercial structures, raw land, etc. Some common examples of asset-based real property are land that is used to build homes, hotels, or other commercial or residential properties. Buildings include office buildings, shopping malls, manufacturing facilities, warehouses, and storage units.
Intra-asset-based real estate deals with the financial attractiveness of specific types of properties, such as single-family houses, apartments, condos, townhouses, condominiums, industrial or office buildings, etc. While these types of properties have their own advantages and disadvantages, they are generally less costly to develop and are much more viable for long-term viability. Some common examples of intraday investments in real estate include vacant land, manufactured homes, industrial buildings, warehouses, and storage units. sewer systems are among the primary types of properties that are considered to be asset-based.
In addition to the above-mentioned major categories, there are also many less-known types of real estate properties. These include land that has been used for ranching, mining, agriculture, forestry, or fishing, residential property, mobile homes, dirt land, and many more. A real estate market is characterized by a wide range of potential property opportunities. In the United States, this market includes a variety of local communities with unique land use and economic characteristics.
The construction of new real estate development projects is among the most profitable industries nowadays. New developments involve the construction of apartment complexes, condominiums, office buildings, hotels, shopping malls, and a lot more. In order to capitalize on this business opportunity, developers purchase property at an affordable price and construct either permanently attached or unfurnished buildings. Permanent attached buildings are those that are constructed on the landowner’s land without the need of permission from the neighboring communities. Unfurnished buildings, on the other hand, are those that are constructed within the boundary of the property owner’s property but can be torn down later on.