Real estate is property comprised of land and the buildings on it as well as the natural resources of the land including uncultivated, farmed crops and livestock, water and minerals. Real estate is the modern term for land and anything that is permanently affixed to it. Fixtures include buildings, fences, and things attached to buildings, such as plumbing, heating, and light fixtures.
The two major types of real estate are commercial and residential real estate. Commercial real estate involves the sale and lease of property for business purposes. Residential real estate involves the sale and rental of land and houses to individuals and families for daily living.
The sale of residential property is heavily regulated. All states require real estate agents and brokers, who earn a commission from the owner of real estate for selling the property. Since a decade, home buyers have been given additional protection under the law. Many states and municipalities require a seller of real estate to file a truth-in-housing statement. A seller must disclose any problems with the home, such as a wetbasement or the presence of termites, on the form. Failure to disclose this information can result in the revocation of the purchase agreement or a lawsuit by the buyers against the seller for fraud. In addition, some laws require an inspector to visit the property to determine if there are any problems.
Real estate can be grouped into three broad categories based on its use:
Residential real estate is a type of property, containing either a single family or multifamily structure, that is available for occupation for non-business purposes. Residences can be classified by, if, and how they are connected to neighbouring residences and land.
Buying or leasing real estate for commercial purposes is very different from buying a home or even buying residential real estate as an investment. Commercial leases are generally longer than residential leases, and commercial real estate returns are based on their profitability per square foot, unlike structures intended to be private residences. Moreover, lenders may require more money for a down payment on a mortgage for commercial real estate than for a home loan.
Industrial property is used for industrial purposes. It sounds simple, but it comes in all shapes and sizes and covers a huge range of business types. Industrial properties can generally be broken down into three sizes: small, large and enormous.
Small industrial sites include single or double-storey buildings zoned for industrial use. These often have flexible interior space, usually a mix of warehouse and office space. ‘Flex’ spaces are used by small businesses such as mechanics, research laboratories and start-ups. Large industrial properties include medium to large warehouses and factories that are designed to manufacture or store goods. They include distribution companies such as third party logistics (3PLs).