Real estate is real property consisting of the structures and land on it, and its accompanying natural resources like water, minerals, or vegetation; immovable property, the same being intended to be lived in by the owner permanently. It is also referred to as proprietary or tenancy property. It includes real property held by a single person, corporation, partnership, or unincorporated association. The word ‘real’ is used here because real property is not the result of inheritance, trust, or lending but is a creation of legal rights, the protection, and assurance of which are enforceable by law. Private property is that which one can buy, build, lend, or transfer without fear of repossession, as is the case with many proprietary properties.
Real estate includes fixed assets like buildings, equipment, supplies, fixtures, and machinery, rights to immovable personal property such as automobiles, houses, and equestrian real estates, and intangible assets such as goodwill and accounts receivable. Real estate includes land that is permanently attached to the earth by the right of ownership. In other words, real estate includes the whole land of which the whole is considered to be a permanent form.
One of the primary economic characteristics of real estate is its high-profit margin due to the relatively lower cost of constructing homes and other structures than most land does lend itself to. This is a major factor in the reason why home prices have continued to increase in the last decade. Residential real estate has always been the largest segment of the real estate market, especially in the United States. Many homeowners are choosing to locate their homes on vacant land that is currently in great condition and has all the economic characteristics needed for a quality home.
There are two major categories of real estate: personal property and immovable property. Personal property refers to items such as homes, farms, and cars that people use on a daily basis. Immovable property is any physical property that is owned by a person and not necessarily held by an individual. Some examples include business real property (such as office buildings and warehouses), commercial real property such as warehouses, retail properties, and raw land or vacant lots.
The two types of real estate vary greatly in value. Personal real estate, such as houses and autos, appreciates more quickly than immovable properties, such as farms and businesses. A house can appreciate from a cheap price to a high price in a relatively short period of time. On the other hand, immovable real estate such as buildings will depreciate in value over a long period of time.
Unlike residential homes, commercial buildings cannot be built on vacant land. Man-made structures must be built on previously developed land. There are many different types of man-made materials used for man-made real estate. Some examples of these materials include steel, aluminum, concrete, plastic, sheet metal, fiberglass, and wood. Wood is the most commonly used material in North America for houses and condos, while fiberglass and plastic are most commonly used for condos and offices.