Types of Real Estate
Real estate is real property consisting of the structures and land on it, and its accompanying natural resources like water, rocks or plants; and its accompanying amenities including crops, livestock or water; immovably permanent property of this kind; a lien vested upon the real estate, buildings, houses or land in general. The majority of real estate in the United States is “immovable”, that is, it is generally of a type that cannot be moved. This includes such things as apartment complexes, condominiums and town homes, apartment buildings, row homes, pre-construction homes, manufactured home developments and the like. A lien is also vested upon immovably permanent property for the purposes of ensuring payment and performance of contract obligations. In most states, this includes but is not limited to mortgage loans.
A contract for the sale and purchase of real estate generally provides for the purchase and sale of properties between two contracting parties. A typical contract will establish the responsibilities of each party involved in the transaction, as well as express the parties’ rights to assign, transfer and sell the property. In short, you are making an agreement regarding the property and how it will be managed by the other party. This contract is referred to as a real estate contract.
There are various economic characteristics of real estate that make it valuable to buyers and sellers alike. Real property is generally sold and bought in its “real world” form – i.e., as it is located on the ground, in its original condition with all its existing features. In its “fictitious world” form, real estate is usually purchased and sold after it has been remodeled so that it conforms to market demands. Economic attributes of real estate include its “income potential”, i.e., its ability to earn income (as opposed to its value), its “saleable” character, i.e., how long it can be held for a profit and its “investment potential”, which refers to its potential ability to generate an income from the rent and sale of the property. Real property used for investment purposes includes such properties as residential real estate, agricultural land, property used for business purposes, etc.
Many factors affect the value of real estate. They include the location and quality of the land, the existing structures on the land (including architectural and technical features), the utilities available on the land (including water, electricity, gas, etc.) and the population of the area where the property is situated. These factors, among others, contribute to the value of the real property. Buyers can maximize the profits that they make by purchasing real estate that meets their needs and is located in an area where there is a demand for it.
It is important to note that the market conditions in any particular region or area will vary depending on the local economy, the availability of jobs, the quality of infrastructure, etc. A buyer should therefore consider all the relevant factors affecting the value of real property before deciding to buy. While these factors may not be known in all cases, they are important in determining the price of real estate and thus one should have a basic knowledge about them in order to determine the price of one’s personal property.
There are three main categories of real estate – residential real estate, commercial real estate and vacant land. Residential real estate deals with houses and apartments that people use as their permanent residence. They include townhouses, condominiums, row houses, triples, etc., while vacant land deals with the remains of past agricultural land or other permanently attached to land after a farmer or other like businessman has finished farming. Vacant land can be useful for resale purposes, as it can be used to construct houses, apartments, condos and businesses. Residential real estate is the most common type of real property purchased by individuals.