What is Real Estate? • Real Estate is any land plus buildings or items that also may be attached • Real Estate is also known as “ an interest in land” • Undeveloped buildings, different types of houses, office and retail store buildings are some examples of real estate • It is mostly used in the market for residential living but there are three types of Real Estate • Residential, Industrial and Commercial
Residential Real Estate • The Real Estate market is well known for investing in or buying/selling residential property. • Residential property can also be a type of leased property which holds a single or multi family structure that is available for occupation for non-business purposes. • When you want to rent residential property, it is a type of property that obtains more than 80% of it’s revenue from dwelling units (house or apartment only)
Industrial Real Estate • Often considered the “staple” of the average real estate investor • Industrial property usually requires smaller average investments, have lower operating costs than retail • Examples of industrial real estate depend on the use of the building; warehouse, manufacturing, distribution • Important factors to consider when looking at industrial property; functionality, location when looking at transport routes etc.
Commercial Real Estate • Commercial property is defined as buildings or land intended to generate a profit, either from capital gain and rental income (property goes up in value) • It is used solely for business purposes, some examples are malls, offices, restaurants etc. • Businesses that occupy commercial real estate usually have the space leased • An investor most likely owns the building and collects rent from the businesses that operate there • Investing in commercial real estate often requires capital to start up and a lot of knowledge such as legal, financial, and regulatory parts of owning this type of property
Real Estate Investments • Two types of Real Estate investments include property ownership, and mortgages • When investing in any type of real estate there are different things to look for other than location, location, location ! • You should look at the type of property one will invest in. • This includes special and multi purpose property
Different kinds of Property • Special purpose property is defined as a piece of land specifically designed and improved for a specific purpose- a school or hospital are some examples • Office property and Retail property are both a type of commercial real estate • Lastly multi-family residential property is apart of residential real estate such as condominiums or other houses used for rental purposes
Thinking Questions • What do you think the main things buyers look for when purchasing a house? • When is the best time to buy/sell a house? Why? • What were the 3 main types of Real Estate? • What would some of the buyer’s of a commercial property concerns be while buying a property? • Commercial and industrial property are often misunderstood. What is the difference the two? Give an example of both of them? • What are some other examples of a special purpose property?