Commercial Real Estate Investment Basics

Real estate refers to any property not designated as personal property by a particular grantor or purchaser. Real estate includes immovable land including the actual buildings on it and all other assets of that nature, including plants, minerals or underground water; and its accompanying natural resources like water, plants or timber. The term “real” is usually interpreted to mean “complete” estate, while “real estate” is used to describe a specific type of real estate. The word “dominant” is sometimes used to define certain types of real estate, in reference to a legal claim to the property.

For example, a parcel of vacant land on which to build a new home can be termed as “real estate”. Vacant land can be used for many different things and can have many legal meanings. A parcel of land can be defined as any vacant land that an owner has developed for any purpose, including residential development. Residential land can also be termed real estate if the majority of people occupying the land are individuals rather than businesses. Developing residential lots is one way an individual can obtain real estate without having to get a traditional mortgage.

There are different types of real estate. In addition to undeveloped land, there are several different types of manufactured homes and modular homes. Manufactured homes refer to a temporary housing facility that is built from pre-manufactured parts. Modular homes are prefabricated buildings that are assembled on site. The assembly-line manufacturing process produces a great many of these types of buildings. These buildings can be used for temporary living arrangements or as places to live permanently.

The housing market is presently experiencing a boom in the construction of new homes. New home construction began at a record pace in 2007, according to the National Association of Home Builders. This new level of construction is being fueled by an increase in mortgage lending standards, falling interest rates, and a lack of inventories in many areas. Home builders have begun to adopt a variety of strategies in order to boost sales and profit levels during this time of high activity.

New home construction projects are comprised of single-family homes, town homes, condominiums, and multifamily residences. Single-family homes are the most popular type of real estate project, followed by condominiums and town homes. Single-family homes are usually constructed on plots of land with attached houses. Town homes are typically constructed alongside homes on the same lot.

There are several ways an investor can invest in commercial real estate. One way is through reits. Reits are certificates of ownership for particular stocks or pieces of property that are traded back and forth between investors. Investing in reits is considered very safe, especially when it involves private, single-family homes.