Real Estate

Today's challenging and evolving housing market proves that desire for homeownership belongs to one of the fundamental things in life. Whatever phase economic or political systems can be going through, people always need to buy or sell property. It's another matter that obviously, there are more and less favorable times for business transactions, and there are good and bad business decisions. Real estate market news and predictions are everywhere nowadays, and it is hard not to get lost in the sea of controversial information and forecasts. Whether you are a home buyer or a seller, it is necessary to research as much as you can about all the ins and outs of home buying, selling, and investing and take control of your home or investment property decisions. We hope that our site will help you to get started.

Real Estate (also called realty, real property) is a legal term which denotes a piece of land along with buildings and structures on it. In some situations the term "real estate" refers to the land and fixtures together, while the term "real property" refers to ownership rights of the land. In common law, real estate refers to one of the two main classes of property, in contrast with personal property (personalty), the other property class. In civil law, the term "immovable property" is normally used to specify real estate.

It is common knowledge that real estate can be used for a variety of purposes. There is real estate that is intended as a primary residence and real estate that is intended for investment purposes and generates rental income and profits.

The real estate investment sector has developed much over the years. Investment property types include apartment buildings, rental houses, condos, commercial or office establishments etc. Generally, there are four types of income-producing real estate, such as offices, retail, industrial and leased residential, and many other less common types, like hotels, parking lots etc. Non-income-producing investments are houses, vacation properties or vacant commercial buildings. You may invest equity in a non-income producing property, but your return will be through capital appretiation and not through rent.

Landownership is one of the types of investment when a person purchases a property, and rents it out to a tenant. A landlord takes the responsibility to maintain the property, pay all the taxes and the mortgage related to it. The landlord charges the rent which covers all these costs and often some additional amounts and charges, depending on many factors, including the location of the property. Make a research into the area and the demand for rental property before you decide to become a landlord.

There are also real estate investment groups which perform the function of small mutual funds for rental properties. The investor purchases the property through a company and becomes a part of that group of company. The company holds the responsibility for building and buying a set of apartments or condominiums and allows the investor to buy a single or multiple properties through them. The investment group takes care of maintenance of the property, advertisement of vacant units and overall management of all the units, in return for which the company receives a certain percentage of the monthly rent. It doesn't only save investors from all the chores a landlord has to deal with, but also offers them the advantage of paying off the mortgage even in case their rental unit is vacant, as a certain amount of rent guards against occasional vacancies.

Basically, there are three major property types with which real estate agents and brokers tend to work. They are: vacant land, residential properties and commercial properties. Vacant land is by definition an unoccupied property, which may also have some utilities and off-site improvements. Investing in vacant land is a risky enterprise, but can result in very big returns in the real estate investment market.

Investors prefer to purchase vacant land that has a potential of future development. These are usually areas that are located near major employment centers, suitable for future infrastructure expansion. However, it takes profound knowledge and great sagacity to identify an expanding market and predict which areas will be in demand soon. Investors should evaluate the development potential of the soil, terrain, and access of the vacant land and determine whether it suits well for building when city expansion reaches this piece of land. Obviously, the value of the land much depends on how build-ready the land is.

Vacant land investors are not there for an immediate return of the invested capital, their goal is to buy a piece of land that will double or triple in value during the holding period. While the investor waits for development, vacant land can still produce income, for instance, it can be used for recreational purposes. Investors often turn vacant land into a camp ground or rent it to fishermen or hunters. As soon as the vacant land becomes valuable due to reaching expansion, investors can choose to sell it or develop it on their own.

The residential type of property is the most popular type with real estate agents. They may specialize in types of residential property, for example, condominiums, separate homes, duplexes, townhouses, high value homes etc.

Investment property is a property that is owned for the purpose of financial profit either through renting or appreciation. When we speak about investment properties, we distinguish between single-family residences and multi-unit properties. Multi-unit properties may serve as primary residences and/or investment properties.

Single-family residences make up the standard property type which is meant to support just one dwelling. They have land separation from all sides of the property and do not have a common area as in a condominium complex. In single-family residences there are no common walls with neighboring properties.

A condominium is a form of individual ownership of a building owned by all residents within the complex. In order to maintain, repair, and improve the common areas shared by residents, association fees must be paid. Any multi-unit structure can become condominium, which means that occupants must purchase their apartments outright or vacate the premises.

A hybrid of condominium and hotel is called a "condotel." Condotels may serve both as long-term residences and offer short-term occupancy. In spite of the fact that units are owned individually, this type of property usually has features of a hotel, like a concierge or a registration desk, food and telephone service, daily cleaning services, and operate as hotels.

Another type of property is called manufactured homes (also called "mobile homes" or "trailer parks.") They can be transported due to their construction on a non-removable steel chassis. Manufactured homes are constructed to adhere to the National Manufactured Home Construction and Safety Standards (The HUD Code) and are often located on leased land, for example, in trailer parks. This is often a low-income housing.

Modular homes do not carry building or zoning regulations. They are similar to any traditional building except for the fact that they are the pre-built modules. They don't have an axle or frame, and transported on a flat-bed truck and then assembled together using giant crane. The modular building process provides considerable time and cost savings.

Vacation homes (also called Second Homes) are residences in addition to a primary residence, typically in resorts or recreation areas. Depending on their purpose, they can be also called cottages or secondary residencies. These properties serve as seasonal accommodation and can be of any construction type, like townhouses, condominiums, or single-family residences. Vacation homes may be rented out to other vacationers when their owners don't use them.

Townhouses are single-family houses usually made up of two floors and sharing side walls with identical properties. Unlike in condominiums, there is no neighboring unit above or below in townhouses. Tenants may have access to a common area such as tennis courts or pool and there is usually an outdoor space in front and behind the property.

Commercial property is the property intended for business or office use. It has been one of the most successfully performing types of asset recently, - people are purchasing commercial property not only for their own business premises, but also as an investment to be leased through a real estate broker. Some of the commercial property is built specifically on business purpose and some - with the potential to convert for business use.

There are special zoning laws which prevent conflicts between residential homeowners and businesses. Commercial property is rarely located in the middle of residential zones but rather concentrates in central downtown areas and busy streets. Some city areas may be designated for "mixed usage", meaning some commercial property may be used for residential purposes, for example, a shopping area with apartments.

The valuation of a commercial property is done applying a different method than in case with the residential property. Among a number of other aspects, the income potential of the property and its historical revenue should be taken into account.

Commercial real estate includes a large group of structure types, as well as vacant land: retail property, office buildings and complexes, multi-family commercial real estate property, industrial, leisure property etc.

Retail properties range from large enclosed shopping malls to single tenant buildings in pedestrian zones. Retail properties are properties used to market and sell consumer goods and services, and include single buildings used as stores for consumer products, as well as malls, offices, shops, hotels, rental garages, warehouses, restaurants etc. Restaurants make a subset of the retail category.

The demand for retail space is formed by such factors as location, population density, population growth, visibility, and relative income levels. Valuations are usually based on size and land value, retail sales per square foot and other investment return calculations. Retail leases are usually longer and retailers are less likely to relocate as compared to office tenants.

Office property is single buildings designed specially for office use or a group of offices in a single building or a group of buildings. Office property is the largest and most popular property type for investors due to their typical location in downtown and suburban office parks. Offices may be grouped in structures with single ownership and listed as commercial office rental property. The owner receives income from the office tenants' rental payments. Office buildings have high operating costs. In case you lose a tenant it will affect the returns for the property.

Multi-family commercial real estate property is about the easiest commercial property type to finance. It is rather popular among investors as income-producing real estate. Multi-family commercial property is usually a building with five or more dwelling units or apartments, having common area facilities. Multi-family properties include duplex homes, buildings which comprise two units either side-by-side or on two different floors.

Industrial property is property used for industrial purposes and may be divided into several types. Depending on the use of the building, there can be a number of types of industrials: buildings used for heavy or light manufacturing, warehousing, research and development, or distribution, factory-office multiuse property, industrial parks etc. When it comes to an industrial property, its functionality plays a primary role, for example, ceiling height, convenience of location, building configuration, loading and the degree of specialization in the space, the presence of outdoor or covered yard. Industrial properties require smaller average investments, and have lower operating costs than office or retail commercial properties.

Leisure property is the hardest type of commercial property to finance. The risks associated with setting up a restaurant, pub or bar, are quite high. In case you are looking to rent a leisure property, it is vital to make sure you have found a perfect location for that. Before you purchase a property, you must have a detailed business plan to show mortgage companies. Investment in leisure property may be profitable, but rather risky due to the risk of tenant default.

As we see, there are many types of real estate, and a number of ways to invest in them. In order to determine which way is most suitable for you and which will bring you the greatest profit, make your own research into the most attractive options and act according to your particular needs, resources, knowledge and common sense.