Main Types of Real Estate

Real estate investing is a business that deals in the buying and selling of property, either for profit or with the idea of making money by using the property to make investments. Real estate is not just any kind of property: it is land consisting of the buildings and other assets on it, and its accompanying natural resources like water, minerals or vegetation; or immovable property like a house, building or real estate in general. Some real estate investing deals include buying and re-selling homes, apartment complexes or condominiums (which are not individually owned but managed by a corporation), warehouses and retail stores. There are several ways real estate can be invested in.

Real estate investing deals mainly in residential properties – houses, apartments, townhouses and condos. Residential properties are usually those that are bought for rental (to be used by people who live there but do not occupy the property physically). A lot of real estate investors buy houses for rent, fix them up and sell them at higher prices than what they bought them for. They try to increase their income by fixing up the properties and selling them at higher prices; or by changing the economic characteristics of the land (making it more profitable or decreasing its price).

Real estate businesses dealing with residential properties take on several forms. For example, some invest in single-family homes and build them up piece by piece, transforming them according to the needs and the economic characteristics of the land (for example, if it is in a bad neighborhood and getting high rates of crime, an investor may choose to invest in single-family houses in that neighborhood and improve them, or else sell them when the land becomes a good one). Others specialize in investing in large parcels of land that cannot be developed, improving them and selling them at higher prices. There are also those who make use of the main types of real estate: building neighborhoods around neighborhoods, building office buildings around townhouses or subways, or using main streets in front of shopping centers to create commercial streets. Other real estate businesses deal with real estate for lease, developing it according to the plans of the owner(s) depending on the owner’s economic characteristics and/or on the desires of the individual(s) who occupy the property.