What is Real Estate & Why invest in House and land Property?

October 5, 2021, 1:07 pm Blog Naija Real Estate Seen: 1341
What is Real Estate & Why invest in House and land Property?
Severally people ask the question what is real estate & why should we invest in land, house or building property? The benefits of investing in real estate are numerous. With well-chosen assets, investors can enjoy predictable cash flow, excellent returns, tax advantages, and diversification and it's possible to leverage real estate to build wealth. Real estate values increase with time.

What is Real Estate & Why invest in House and land Property? Bellow will give you an answer to all your questions.

Real estate is the land along with any permanent improvements attached to the land, whether natural or man-made including water, trees, minerals, buildings, homes, fences, and bridges. Real estate is a form of real property. It differs from personal property, which are things not permanently attached to the land, such as vehicles, boats, jewelry, furniture, and farm equipment.

People often use the terms land, real estate, and real property interchangeably, but there are some subtle distinctions. Land refers to the earth's surface down to the center of the earth and upward to the airspace above, including the trees, minerals, and water. Real estate is the land, plus any permanent man-made additions, such as houses and other buildings. Real property is one of the two main classifications of property is the interests, benefits and rights inherent in the ownership of real estate.

Types of Real Estate
There are several types of real estate, each with a unique purpose and utility. The main groups are:

a. Residential real estate:
Residential real estate consists of housing for individuals, families, or groups of people. This is the most common type of estate and is the asset class that most people are familiar with. Within residential, there are single-family homes, apartments, condominiums, townhouses, and other types of living arrangements. Generally, any property used for residential purposes.

b. Commercial real estate:
Commercial property are land, houses or buildings that are used for commercial purpose by businesses to carry out their operations. These real estate includes shopping malls, individual stores, office buildings, medical centers, gas stations, grocery stores, hospitals, hotels, offices, parking facilities, restaurants, shopping centers, stores, and theaters. You can simply say, any property used singly and specifically for business purposes is known as a commercial real estate

c. Industrial real estate:
Industrial real estate refers to land, houses or building property that are used specifically for industrial purpose. They are industrial business places for activities such as factories, mechanical productions, research and development, construction, transportation, logistics, power plants, manufacturing, production, distribution, storage and warehouses.

d. Land:
Land real estate is the bedrock for all other types of real property. Land includes undeveloped property, vacant land, and agricultural land farms, orchards, ranches, and timberland. Developers acquire land and combine it with other properties called assembly and rezone it so they can increase the density and increase the value of the property. Land typically refers to undeveloped property and vacant land.

e. Special purpose:
Special purpose real estate as the name implies refers to properties used by the public for special purpose. Property used by the public, such as cemeteries, government buildings, libraries, parks, places of worship, and schools.

How the Real Estate Industry Works
Despite the magnitude and complexity of the real estate market, many people tend to think the industry consists merely of brokers and salespeople. However, millions of people in fact earn a living through real estate, not only in sales but also in appraisals, property management, financing, construction, development, counseling, education, and several other fields.

Many professionals and businesses including engineers, accountants, architects, banks, title insurance companies, surveyors, and lawyers also depend on the real estate industry.

Real estate is a critical driver of economic growth in many developed and developing nations of the world.

Jobs and Careers in Real Estate Industry
Real estate industry is a major job creator for both educated and uneducated. Graduates and none graduates earn a living through real estate. Now let’s explore how the industry works and what the major jobs and careers are. The real estate industry can be divided into several different areas of specialization, and each area you focus on, you rest assured of earning a living:

a. Development
Real estate development is a process that involves the purchase of raw land, rezoning, construction and renovation of buildings, and sale or lease of the finished product to end users. Developers earn a profit by adding value to the land creating buildings or improvements, rezoning, etc. and taking the risk of financing a project. Development firms create a new product, which can be thought of as the “primary market” or generation of new inventory.

b. Sales and marketing
Sales and marketing firms work with developers to sell the buildings and units they create. These firms earn a commission for creating all marketing material and using their sales agents to sell the inventory of completed units. These firms typically focus on new units.

c. Brokerage
A real estate brokerage is a firm that employs a team of real estate agents realtors who help facilitate a transaction between the buyers and sellers of property. Their job is to represent either party and help them achieve a purchase or sale with the best possible terms.

d. Property management
Property management firms help real estate owners rent out the units in their buildings. Their jobs include collecting rent, showing units, fixing deficiencies, performing repairs, and managing tenants. They charge a fee, typically a percentage of the rent, to property owners.

e. Lending
Lenders play a major role in the industry as virtually all properties and developments use leverage debt to finance their business. Lenders can include banks, credit unions, private lenders, and government institutions.

f. Professional services law, accounting, etc.
There are a variety of real estate professionals who work in the industry and help make it function. The most common examples other than the ones listed above are accountants, lawyers, interior designers, stagers, general contractors, construction workers, and tradespeople.

If you’re looking for a career in real estate, you may want to consider any of the above areas of the industry.

Here are the most common jobs titles in the industry:

- Analyst – Performing financial analysis and valuation of properties
- Appraiser – Valuing properties
- Agent – a sales agent or “realtor”
- Building Inspector – Someone who examines buildings and works with appraisers
- Commercial Broker – An agent who sells commercial properties
- Director of Real Estate – A corporate job
- Home Inspector – Someone hired to assess the quality of a home for a seller or purchaser
- Loan Underwriter – A person who analyzes the creditworthiness of a borrower
- Mortgage Specialist / Underwriter – A person who approves mortgage applications
- Real Estate Attorney – A lawyer who specializes in real estate transactions

How to Invest in Real Estate
Real estate investment is verse, and there is an assurance for good return on investment. There are a number of ways to invest in real estate. Some of the most common ways to invest directly include:

- Home ownership
- Rental properties
- House flipping

If you buy physical property e.g., rental properties, house flipping, you can make money two different ways: Revenue from rent or leases, and appreciation of the real estate's value. Unlike other investments, real estate is dramatically affected by its location. Factors such as employment rates, the local economy, crime rates, transportation facilities, school quality, municipal services, and property taxes can drive real estate prices up or down. You can invest in real estate indirectly, as well.

Why Invest in Real Estate House and Land Property?
This question is so big and simple to answer. If you want to borrow money from bank what do they request from you? What is that thing has the ability to increase over time?

The benefits of investing in real estate are numerous. With well-chosen assets, investors can enjoy predictable cash flow, excellent returns, tax advantages, and diversification—and it's possible to leverage real estate to build wealth. Thinking about investing in real estate? Here's what you need to know about real estate benefits and why real estate is considered a good investment.

Real estate investors make money through rental income, appreciation, and profits generated by business activities that depend on the property. The benefits of investing in real estate include passive income, stable cash flow, tax advantages, diversification, and leverage. Real estate investment trusts REITs offer a way to invest in real estate without having to own, operate, or finance properties.
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About the Author: Isaac Grant Prayer
Isaac Grant Prayer
An Engineer, Writer & Researcher, Coder and Developer, GIS Specialist, Drone Surveyor and Tech lover