A complex and expansive industry, Real Estate encompasses a wide variety of properties, structures and assets. Whether you are a homeowner, broker, investor or developer, understanding the fundamentals of real estate can help you make more informed decisions about buying, selling and investing in this asset class. This article will explore the basics of Real Estate, including the various property types, the market cycle and a few essential real estate terms and concepts.
The term “real estate” refers to land and the permanent structures attached to it, such as houses, garages, swimming pools and landscaping. These structures factor into the value of a piece of real estate. Movable items, such as appliances and even a movable picnic table, are not considered part of real estate, but instead are classified as personal property. Real estate also comes bundled with inherent rights that allow owners to utilize, sell or lease the land and any buildings on it.
Most people purchase residential real estate, such as a single-family home or apartment building, to serve as their primary residence. This typically represents the largest and most significant financial investment a person will make in his or her lifetime. Some people also invest in residential real estate as a money-making venture, flipping homes or renting them out to tenants for monthly income.
Commercial real estate is used for business purposes and includes office buildings, retail space, strip centers and warehouses. Industrial real estate is less common and refers to land and facilities used for manufacturing or processing goods. Land that is not zoned for any commercial or industrial use is referred to as land/farm or raw land. Must visit https://www.webuyhousesfastntx.com/sell-your-house-fast-in-corsicana-tx/
The development and construction phase of real estate is when the initial work begins on a project. This is when developers, municipal officials, architects, engineers and contractors work together to turn a blueprint into a tangible asset. Some developers buy existing property and renovate it to resell at a higher price, while others will build new structures on undeveloped land.
Once a building has been constructed, the owner will use it to conduct business until it’s occupied to at least 95% occupancy, at which point it is considered stabilized and ready for sale. During this stage, the owner will often use a property manager to oversee operations and collect rent from tenants.
Brokers, appraisers, attorneys and financiers are external parties that offer expertise in various aspects of real estate transactions. For example, brokers possess extensive local market knowledge and can guide buyers to properties that meet their criteria. On the other hand, appraisers can provide independent valuations of properties and recommend improvements to increase their value. Attorneys can assist with legal documents and finance, while financiers can help secure loans for purchasing property. In addition, these professionals can help facilitate and expedite the process by coordinating between buyers and sellers. Without the assistance of these outside experts, a real estate transaction can be lengthy and complicated.