Real estate is a piece of land with the other external additions like trees and plants within the limits of the boundary but real property is the land along with its rights in physical documents to own it. Though we say that real estate is just that piece of land, it can be broadly classified in three different ways and forms- residential, commercial and industrial.Residential real estates predominantly include houses, apartments, villas and other forms of townships. In US, home ownership is the most common form of real estate investment and most of the residents of the United States are owners of their houses.Commercial real estates concentrate mainly in business, office, warehousing and other forms of commercial requirements. This is completely different from the above category and is targeted only on those looking out for a commercial rental property. The rates for them generally depend on the area they occupy, in simple terms rent/square feet and are generally costlier than that of the residential ones. The area here would be smaller but the value for the vacancy would be higher.
The third category is the industrial real estates. These include factories, farms, plantations and even mines. All types of investments are aimed at generating income for the investor but among all of them real estate has a greater value for it is influenced constantly by one or the other societal factors. The income that comes from this sector is influenced by not just one factor but by many like area, development, amenities, schools and medical facilities, jobs and their proximity and other residential requirements. People who are interested in real estate business need not necessarily own a land or an apartment. Many of them do this in partnership with one or the other and then distribute it among many small investors who try to see some extra pennies through rental properties.
Real Estate/property valuation
Many people think that it is just the buying, selling and bargaining of property value that comprises the real estate business. But in reality, it is not so and the dealers have to be efficient in subjects like investment analysis, real estate financing, taxation, insurance etc… This gives a person the complete knowledge and knowhow in dealing with a particular property and is in fact an indication for his good and honest working.
Important factors that affect the property`s value
While determining the value of a property, there are many factors and concepts that play a major role. Some of the valuation concepts are;Value – the first and foremost is the value of the property. Unlike the perishable and consumer goods, the value for a piece of land can be determined and realized over a stretched period of time. Social and economical changes, political influences, government rules and regulations also impact the valuation process by affecting the following: Demand – demand increases when a property is available with all the facilities that fulfill a proper living. Utility – the availability of facilities and their applications fulfilling the demand factor. Scarcity – availability of a particular land for a higher demanding force. Transferability – the ease and comfort with which the property can be transferred from one person to another. Value – value is not equal to the price or cost of the property as many people think. All the three are different.