What is Real Estate?

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Having even the most basic knowledge of some fundamental terms and concepts from the world and society surrounding us is essential, because you never know when you might need them in life. Whether they’ll be useful in your personal or your professional life doesn’t matter, but what matters is that you’re able to help yourself or others in certain situations. That is why in this article we’ve decided to talk about what is real estate; this subject concerns us all because most of us own real estate, even though we’ve never thought about it what way. This information may be helpful to you when you want to sell or rent a house, an apartment, a condo, or just some land; when you are interested in buying, you will also need to know something about it although you may hire a professional to deal with more complex matters.

So, what is real estate? To begin with, the simplest way to describe it is by saying that any land and building is considered real estate; moreover, any resources on that land are part of the real estate, and they add to its value. Thus, things like minerals, crops, trees and plants, and even water are important assets. Renewable resources such as water and crops are even more important because they can generate a steady source of income, thus making the land almost impossible to value. However, nothing is impossible in the real estate business, and everything finds a price here. In fact, many people, both extremely rich and less so, find it important to invest some of their capital into real estate because it never, or seldom devalues.  It is difficult however to tell whether a piece of land or a building will maintain or increase their values, but there are professionals who can analyze that information for you.

The rules and laws of real estate differ from country to country and from continent to continent, and they depend on many factors; these factors can be historical, economical, political, geographical and so on. For example, foreigners, and especially Americans, cannot purchase real estate in Mexico, excepting special cases when they are part of a Mexican Corporation or a Mexican trust. Usually, they are not allowed to purchase land closer than 100 kilometers from the coast. This measure was taken years ago for both economical and political reasons, because Mexico is much poorer than other countries like America, so they didn’t want to risk being bought massively by rich businessmen or corporations.

It is difficult to explain what is real estate precisely because different rules and terms apply for each country. In Honduras, for example, foreigners can purchase beach front property privately, so there are no restrictions in this field. Real estate is a large and important part of the business sector, especially since many privates can and own lands and buildings. Thus, basically anyone can be involved in the real estate business. A good example here is post-Katrina New Orleans, when many traditional houses were destroyed by the water; subsequently, many Americans from other states moved to New Orleans and started buying and renovating these houses, after which they sold them for a profit.

The real estate business is very complex now, and there are many different fields managing various aspects of the issue. When companies deal in real estate, it is called commercial real estate; because it is difficult to decide on a fair price for a piece of land or a building due to the fact that each has its special features, advantages and disadvantages, there are several branches of real estate. Thus, we have appraisal, which deals precisely with establishing a value for the real estate in question; next, there is the brokerage, which consists of a mediator which makes it easy for seller and buyer to get to an agreement; the mediator charges a fee, of course.

The development part of real estate business deals with acquiring lands or buildings and turning them into something else for profit. For example, according to the experts at DePalma Construction, investing in energy-efficient upgrades to an old building or home can make a it “significantly more valuable if the homeowner decides to sell in the future.” One could take an old building and modernize it, thus transforming it into office spaces which can be either sold or rented. There is also property management, which is when you hire someone to deal with your assets, to make sure that your land or building don’t lose value.

If you wanted to know what is real estate perhaps this information was helpful for you. Those who are interested in working in this domain shouldn’t find it too difficult to find some classes to help them get accredited. However, this may depend on your location, and we advise you to do some research and find out whether the market is in need of more professionals in the field.

January 2022