What is real estate
Real estate is defined as a piece of land with anything that is permanently attached to it, such as: buildings, items attached to their structure, sheds, trees, water, and practically everything that is fixed and is unmovable found on that specific piece of land. The term “real estate market” is often used by the media from the viewpoint of residential living. Some examples of real estates: houses, townhomes, condominiums, office buildings, retail store buildings, factories, and undeveloped land.
To further answer your question – what is real estate – we need to point out that most important factor that intensely affects a real estate is the condition of the area located in the close proximity of the specified property; thus, the maxim used frequently in the real estate market – location, location, location. Other factors that primarily affect the real estate values are: the crime rate, school quality, the availability of jobs, and the amounts paid for property taxes. Another extremely important factor (although fortunately, it does not occur that often) is the national or worldwide recession.
Categories of real estate
Now that we have established what is real estate, we will further discuss its categories. Depending on its use, real estate can be divided into 5 categories: residential, industrial, agriculture, commercial and special purpose.
A residential real estate is defined as a property that has the role of housing a person, for example: houses for a single family, duplexes, or houses of multiple families. The residential real estate may be located in urban, rural or even suburban areas.
A commercial real estate is a site where commerce or business occurs, for example: office buildings, motels, hotels, theaters, malls, shopping centers, parking facilities. When buying a commercial real estate, the buyer is usually interested in the parking, zoning, and cap rates; therefore, it is ideal to look for a real estate professional who is specialized in the commerce or business field, and not one who is a residential real estate specialist.
The industrial real estate is often confused with the commercial real estate, because it also has a commercial use. However, as we will further discuss, special-use and agriculture real estates have commercial uses, as well, and they are also two different categories. An industrial property includes the land on which are located buildings with industrial purposes, such as: warehouses, the land located in industrial areas, power plants, factories, etc.
Agriculture real estate encompasses: ranches, timberlands, farms, orchards, while special purpose real states include: the lands held by government, schools, cemeteries and churches.