Last Updated on January 10, 2019
Learning more about real estate could be a great help if you plan to invest in this kind of business. Find out the different types of real estate and how this kind of business works below.
Are you familiar with what real estate is? In its simplest definition, real estate is the property, buildings, land, air rights above the land and underground rights below the land. It also means physical or real property. And these days, numbers of individuals are into real estate business due to numbers of reasons.
However, you should know that there are four types of real estate and these are the following:
Residential Real Estate
This type will include both the new construction and the resale homes. The single-family homes are considered as the typical category. There could also be co-ops, condominiums, duplexes, townhouses, triple-deckers, high-value homes, quadplexes, vacation homes, and multi-generational ones.
Commercial Real Estate
For the second type, this includes the strip malls, shopping centers, educational and medical buildings, offices and hotels. In most cases, apartment buildings are considered commercial though used for residences. And that is because they are owned in order to produce income.
Industrial Real Estate
On the other hand, this third type would include those manufacturing properties and buildings as well as warehouses. These buildings could be used for storage, production, research, and goods distribution. Some of the buildings which distribute goods might also be referred to as commercial real estate. It is vital to classify because the construction, zoning, and sales are differently handled.
Well, this real estate type includes the working farms, vacant land, and ranches. Vacant land has subcategories including early development, reuse, undeveloped, site assembly and subdivision.
So, if you plan to invest in real estate, be sure that you are familiar with what kind of real estate you would want to be into.
How the Real Estate Business Works?
So, now that you have an idea on the different types of real estate, you should also know how the said industry works? Again, real estate refers to producing, selling and buying real estate. And it can affect the economy of a particular country by being a critical driver of economic growth.
Real estate is also about the construction of new buildings which is a component of a gross domestic product. This would include the industrial, commercial and residential buildings.
On the other hand, new home building is considered as a critical category simply because it includes construction of single-family homes, condominiums, and townhouses. There is an association that would provide the monthly data on home sales and the average prices. And this data would be a leading economic indicator.
And those who assist businesses, homeowners, and investors to buy and sell the different types of properties are called real estate agents. The real estate industry is divided into specialists who focus on each discussed type.
Sellers’ agents are those that help find buyers through professional contacts or Multiple Listing Service. They are the ones to price the property and would help a lot to make your property looks at its best to the customers. They also assist in negotiations with the buyers, therefore, helping you to get the highest price as possible.
On the other hand, buyers’ agents are those that offer the same services for the home purchaser. And these people exactly know the local market like Albuquerque real estate so they could find a property which could meet your most important criteria. They also help you regarding negotiating for you and pointing out some reasons why the seller should accept a lower price. And they also provide help with the legalities of the entire process including inspection, title search, and financing.
Since you are into buying or selling a home, then you are considered to be engaging in real estate investing. This would mean that there is a need for you to consider some essential factors. Some people would do so well with investing, but others do fail due to some reasons.
However, bear in mind that before you invest in real estate business, you should be familiar with the current business cycle.
Investing in real estate could also be possible even if you don’t buy a home. How? You can just buy stocks of homebuilders. The stock prices would rise and fall with the housing market. Indeed, there are various options to choose from if you want to engage in the industry of real estate.
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