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Real Estate

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What Is Real Estate?

Real estate is defined as the land as well as any permanent improvements related to the property, whether natural or man-made, such as water, trees, minerals, buildings, dwellings, fences, and bridges. Real estate is a type of real estate. 

Deeper Definition

Real estate is a type of “real property” that comprises land and anything permanently related to it, whether natural or artificial. Real estate is classified into five types:

  1. Residential real estate:Any home that is utilized for residential purposes. Single-family homes, condominiums, cooperatives, duplexes, townhouses, and multifamily housing with less than five individual units are examples.
  2. Commercial real estate:Apartment complexes, gas stations, grocery shops, hospitals, hotels, offices, parking facilities, restaurants, shopping malls, stores, and theaters are examples of commercial properties.
  3. Industrial real estate:Any property utilized in manufacturing, production, distribution, storage, or research and development. Factories, power plants, and warehouses are all examples of industrial structures.
  4. Land:Underdeveloped property, unoccupied land, and agricultural land are all examples of undeveloped property (farms, orchards, ranches, and timberland).
  5. Special purpose:Cemeteries, government buildings, libraries, parks, places of worship, and schools are examples of public property.

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. It is the interests, benefits, and rights inherent in the ownership of real estate. Broadly speaking, real estate includes the physical surface of the land, what lies above and below it, what is permanently attached to it, plus all the rights of ownership which include the right to possess, sell, lease, and enjoy the land.

Real Estate Example

You can invest in real estate directly by purchasing a home, rental property, or other property, or indirectly through a real estate investment trust (REIT). Real property shouldn’t be confused with personal property, which encompasses all property that doesn’t fit the definition of real property. The primary characteristic of personal property is that it’s movable. Examples include vehicles, boats, furniture, clothing, and smartphones.

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