Fundamentals of Investing in Real Estate- How it Works

Wednesday, August 16, 2017, 6:00 AM | Leave Comment

Real estate is a term that means physical or real property. Since it is something that people can feel and physically touch, many investors regard real estate as an investment that is tangible and more real in comparison to some options.

This type of investment has produced long-term appreciation and consistent wealth for several people over the years.

Depending on where your real estate is located, you will be able to enjoy significant returns on the investment you make.

  • Real Estate Classifications

    Real estate is classified in five different ways with the main types being residential and commercial.

    1. Residential real estate consists of resale homes and new construction. The categories include townhouse, condominiums, duplexes, vacation homes and single family homes.

    2. Commercial real estate consists of malls, shopping centers, medical buildings, offices, hotels and educational buildings. Although apartment buildings are used as residences, they are usually considered to be commercial because ownership is based on generating income.

    3. Industrial type of real estate constitutes manufacturing property and buildings. It also includes warehouses. Buildings in this category can be used for production, research, distribution of products and storage.

    4. There are buildings for distributing goods that are regarded as commercial real estate. The way different buildings are classified is crucial because the way sales, construction and zoning are handled will differ. View houses for sale here.

    5. Land includes ranches, farms and vacant land. Vacant land consists of subcategories such as undeveloped, subdivision, early development and reuse.

  • Real Estate and Economic Growth

    Real estate is a term that is also used to refer to the production, purchase and sale of real estate. The industry is a vital aspect of economic growth.

    One of the components of GDP or gross domestic product is constructing new buildings. This includes residential and commercial buildings. It makes a significant contribution to the region’s economy.

    Another vital category is building new homes. This includes the construction of condominiums, townhouses and single family homes.

    Information pertaining to the sales of new homes is among the top economic indicators. It serves as a signal of how the market will perform in a number of months in accordance with the amount of time that is required for constructing new homes.

  • Real Estate Specialists and Professionals

    • Real estate agents help businesses, homeowners and investors purchase and sell different types of properties. The real estate sector is usually divided into the real estate specialists that are focused on each of the classified types of real estate.

    • Sellers’ agents provide assistance for finding buyers through professional contacts and listing services. They are responsible for pricing the property by using comps or comparative listings of properties that have been recently sold. They can also help you improve the appearance of your property to make it more attractive to customers.

    • Buyers’ agents provide helpful services for home buyers. They know about the market and can identify the property that will meet your criteria. They compare prices that allow them to find affordable areas. Buyers’ agents carry out negotiations and give reasons why sellers should accept lower prices. They understand the legalities such as title searches and inspections.

Author Bio

Robert Smith is a locally based freelance writer and consultant whose services have been utilized by a number of sites, publications and businesses. He is a firm believer in professionalism and ambition. To find out more about houses for sale, please go to the site.

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