Real estate is real property consisting of the buildings and land on it, and its accompanying natural resources like water, minerals or plants; and its accompanying liens, such as fences, fixtures, equipment and structures used for business purposes. Real estate also includes personal real property owned by an individual, corporate real estate owned by a corporation, partnership, or organization, or government-owned real estate. The term real estate was first used in the United States in the 1820s. Since then, it has been an integral part of the American economy and now is the largest market in the world with daily turnover estimated at more than 1 trillion dollars.
Real estate investing refers to a number of methods of buying and selling land, buildings, improvements, and other resources that add value to real property. Most real estate transactions involve buying land at a lower price and developing it into a desired commercial or residential property. Often, real estate investors make such exchanges as they attempt to increase their net worth, or gain interest in other potential properties. Real estate investors may also make improvements to real property that will increase the value of the existing structure.
Developing real estate requires the purchasing of land at a low point in time, adding improvements, and developing the land into a desired condition. Investors who make such exchanges look for property that has the potential to increase in value due to improvements made, or to increase in the desirability of the land. These properties are called developable lands. Properties that are more economically or environmentally desirable may not be as easily developed as those that are less desirable.
One type of residential real estate includes single-family residences. Such homes can be built on land that has already been used for housing purposes. Examples of this type of housing include duplex housing developments, townhouses, condominiums, row houses, and condos. Residential real estate includes apartment buildings, townhomes, and condominiums with higher levels of density than single-family residences. In residential real estate, neighborhoods may exist within communities.
Another type of residential real estate is permanently attached to the property. Permanent fixtures include everything that is needed to build a house, such as plumbing, heating systems, electrical wiring, and fixtures related to interior spaces, such as cabinets. Permanently attached properties are usually sold for a substantial profit because there is no chance of building the home on a piece of property that is already used for housing. Permanent fixtures can also be purchased on the open market as secondary property. When looking at an open market, a realtor should examine whether or not the property is likely to change in the future.
One type of real estate involves purchasing piece of property with the intention of improving it and then attaching a piece of property to that property for an improved appearance. In this type of development, the improvements are made with the intention of generating revenue from them. An example of this type of development is a housing subdivision that has houses that are all identical in terms of size, shape, and color, but which are positioned closer together for better public access. Developers interested in making these types of improvements should research local economic characteristics and sewer systems to determine if they would be profitable.