Investing In Real Estate

Real estate is property comprising of the physical structures and land on it, and its accompanying natural resources like water, plants or minerals; immovable property of that sort; a right vested in a parcel of real estate, buildings or housing in particular. When applied to real estate, the phrases ‘real estate’ or ‘real property’ are often used interchangeably. However, they are distinct legal and economic concepts. As the former refers to the entire property and its rights, while the latter covers only those features of the property which are immovable for the tenants or owners. A few exceptions are where the property is used as a grazing ground by animals for example. In such a case the owner would be regarded as the landlord and the tenant would be considered the lessee.

There are various economic characteristics of real estate, which are important for any economy. The land, of course, is the primary feature and one of the most economically viable assets in any nation. It can be farmed, cultivated, used for housing, etc. It also forms a major input in manufacturing, agriculture and industry. Each of these economic characteristics has a role to play in the economy and its overall well being.

Building material is another important aspect of real estate. While there are different kinds of land, all of them offer opportunities to build and develop properties. Some of the most important categories of buildings tangible assets include residential buildings, retail stores, office complexes, industrial/business premises, infrastructure, etc. In the context of residential properties, the structure and location of houses, apartments, and condominiums will have an impact on the building’s economic viability. This holds true for industrial and business premises as well.

Another factor that contributes to the efficiency of the real estate market is the number and type of buildings. The sheer number of available properties increases the scope for economic development. A city with a good infrastructural setup, including good schools, hospitals and other public services, will have more buyers and a better chance of securing lucrative deals. On the other hand, a remote rural community will find it difficult to attract investments due to the lack of available land and structures. The presence of personal property and personal assets also increase the attractiveness of real estate.

As has been noted earlier, the infrastructural setup and the overall living conditions in cities have an impact on the economy. A city with a good infrastructural setup will be able to attract investors. At the same time, a remote rural community may not have the necessary infrastructures to support development. This will result in lesser investment opportunities and housing starts. There are many people who either do not want to move towards cities or cannot afford the high cost of housing.

You can also opt for real estate investment through rent-to-own contracts. This allows you to get the benefit of rental income without having to actually own the rental property yourself. This can give you the flexibility to shift your investment from one area to another if the real estate and rental property do not support your business.