Real Estate Investing As an Economic Characteristic

Real estate is real property consisting of the actual buildings and land on it, and its accompanying natural resources including water, plants or minerals; and its accompanying advantages, such as water, crops or forests; or an equitable interest in it, buildings, land or housing in general. Real estate includes land as well as improvements and attachments to that land. It also includes the improvements and attachments to any improvements, such as buildings, in turn, that a person may make on his own, whether improvements are financed or secured by a mortgage.

There are eight different types of real estate. These include residential real estate, Special use real estate, Business real estate, Non-residential land, Municipal land, Retired home, Residential lot, Contract lot and Warfield land. The term “Special use” refers to any land which has a specific use for a purpose not shared by any other type of land. Here are the four types of residential Real Estate:

Residential Real Estate encompasses the land designed exclusively for the exclusive use of one or more persons. Here the land can be developed into residential lots with detached houses, apartments, condominiums or townhouses. The houses may be erected on to the land as one unit or may be built upon parts of the land individually. Some of the main types of residential Real Estate include detached houses, apartments, condos, townhouses, mobile homes, duplexes, rowhouses and manufactured homes.

Commercial real estate, unlike residential, includes structures such as shops, office buildings, warehouses, garages, stores, public storage and repair stands. There are two major classifications of commercial properties, permanent fixtures on the property and fixtures that can be removed or changed: leasehold buildings and owned structures. Permanent fixtures include structures such as hotels, restaurants, car dealerships and technical facilities. Leasehold buildings include apartments, houses, townhouses, condos and cooperative buildings that are leased for a set period of years with the option to buy out or to return the property to the lessee.

One of the economic characteristics of Real Estate is the ownership characteristics. Here the landowner retains the complete ownership of the Real Estate and benefits from the advantages of utilizing the asset. The advantage includes: tax benefits, less capital expenditure, less personal liability, less leasehold taxes, no capital expenses (including upkeep and cleaning), greater cash flow, freedom from mortgage payments, preservation of heritage, protection from storm damage and noise. In addition, Real Estate has proven to be an excellent source of generating income due to the increased value of the land, its ability to accommodate growth, and its accessibility. There are two types of Real Estate: Primary land and secondary land. The primary land has a fixed-rate determination and the secondary land varies with the tax value.

In order to succeed in Real Estate investment, it is necessary to learn about real estate market trends. One of the ways of learning is through reading real estate trade publications, looking at housing websites, talking to realtors, and reading financial newsletters. It is important to make a profit in real estate when buying and selling both the personal property and the real estate property. One way to make a profit is through using leverage; another is by leveraging the tax benefits of Real Estate. Finally, if the properties are located in a good area, then the property can appreciatively in price.