The Fundamentals of Real Estate
Real Estate comprises land including buildings, sheds and any other fixtures attached to it. The real estate market covers residential, commercial and industrial entities. They include land that is still undeveloped, houses, condominiums, office or store buildings and factories, etc.
There are three basic types of real estate. They are Residential Real Estate, Commercial Real Estate and Industrial Real Estate.
1. Residential Real Estate
When a real estate property is used for residential purposes, it is called as Residential Real Estate.
2. Commercial Real Estate
When a real estate property is utilized for activities related to business of any sort, it is called as a commercial property. It comprises shopping hubs, farms, offices, etc. Commercial Real Estates are properties that are purely business oriented like malls, restaurants, gas stations, etc.
3. Industrial Real Estate
Here, the real estate property is used for the purpose of manufacturing and production.
A Real Estate Agent is one that is licensed by his state or province for representing either a buyer or a seller in any transaction of a real estate and who gets commission for the said work.
Market Analysis Real Estate
This is a procedure that is followed by real estate agents with:
1. Buyers in order to confirm values before the orders of purchase or
2. Sellers in order to establish the listing prices.
This is done by inspecting the records of the properties that were recently sold in the same area and those which were similar in feature to the property under consideration. Then due comparison and adjustments on the basis of feature considerations are done to get a rough estimate of the value of the property. Further, it would be compared with currently listed similar properties in the area in order to gauge the competition level and then the final estimate would be arrived at.
A Real Estate Investment Group is an association that buys and / or develops many property units and then sells them as rental properties to investors, by searching for tenants, doing maintenance of the area; in return for which it is profited by a certain percentage of the proceeds from the monthly rent of the investors.
A Real Estate Investment Trust, also denoted by REIT are investment modes in which people can invest through direct purchase of the shares on an open exchange or through investments in mutual funds that deal with public real estate. Such investments in the real estate market yield dividends.
A Real Estate Limited Partnership or RELP is that limited partnership body which invests in real estate. Its property manager/ real estate development firm handles the working of the body which entails seeking finances from outer sources for the project for which it gets ownership shares as limited partners.
A Real Estate Operating Company or REOC invests in real estate. Its shares are traded on a public exchange. Whatever earnings it gains is reinvested in the business and not distributed amongst the unit holders.
Investment Property is an investment that aims to generate profits. When the same is done in real estates, returns are in the form of rent, sale or resale. Examples: Apartment buildings, rental houses whose owners get income through rent and sale/resale.
Real Estate Trends are patterns or changes in the progress of the real estate industry that become noticeable with time due to changes in various factors such as economic upheavals, mortgage rates, speculative markets, etc.
The real estate situation affects the growth of the economy in a big way. As such, the real estate news is a pointer for the stock market and new home building stocks as well.