Real Estate – What it Involves
Real estate is an umbrella category of “real estate” which includes anything permanently attached to the earth, whether man-made or natural, and everything permanently attached to it, such as homes, houses, minerals, buildings, bridges, and fences. Real estate has become very valuable in recent years as the country’s population continues to grow. While residential real estate generally lends itself to short sales, when the value of the real estate goes down, some type of financial restructuring may be necessary to keep the business viable. Real estate investors usually purchase real estate as an investment with the intent to resell later for a profit. Real estate investing is not recommended for first-time investors.
There are many different types of real estate, including land, which is used to develop residential real estate. In land, a piece of land can be developed into homes, apartment complexes, commercial buildings, farms, golf courses, industrial production, residential and industrial parks, hotels, motels, shopping centers, malls, and others. Developed land can also be used to develop golf courses, tennis greens, athletic fields, public parks, museums, and other facilities. The economic characteristics of real estate include the amount of money an investor will earn when the land is sold; the property’s rental and use value; the amount of time it will take for an investor to recoup his investment and start making money again; and the impact on the surrounding community.
Real estate also includes the components of land. Buildings include apartment complexes, office buildings, single-family residences, farm buildings, warehouses, strip malls, hotels, motels, shopping centers, and schools. The economic characteristics of real estate also include the impact it has on the surrounding community. Commercial properties can add to the value of the community, while single-family residences provide neighbors with a place to live. Developed land can add significantly to the population of the community and its infrastructure.
Another important aspect of real estate involves the maintenance and upkeep of the properties used to create the development. After an area has been developed, property used to build on that land must be maintained. This may include repairing roofs, gutters, pipes, septic tanks, parking lots, sidewalks, roads, fencing, fire hydrants, streets, walls, and landscaping. This maintenance work costs millions of dollars each year and requires the help of many people. For example, new houses must be built with asphalt surface; new buildings that are torn down must be taken care of; roads, sidewalks, and parking lots must be repaired; buildings should be secured with gates and other physical barriers; and landscaping should be tended to regularly.
One of the most unique features of the real estate industry is the sale and purchase of land. Home buyers and sellers often work together to locate land that suits their needs. Buyers can purchase homes directly from developers or they can go through brokers. In some cases, a seller might list a property as for sale by owner (FSBO). Both buyers and sellers have many options when purchasing or selling real property. These options include: Using title insurance to protect the bank’s interest; holding onto a home for months while negotiating price; and holding onto a home until the market recovers, which could take several years.
Other examples include: Buying personal property that belongs to someone else; buying real property that is part of a series of residences; and buying and selling vacation homes. Real Estate agents also help buyers and sellers find property that is suited to their needs. They make use of resources such as databases, directories, brochures, and websites. They also conduct house inspections, attend property auctions, and evaluate properties on behalf of buyers or sellers. They also negotiate contract negotiations, establish financing, close deals, and draft legal documents required for closing.