What Real Estate is?
Real Estate is the term that encompasses everything related to the real estate market and sector... Not only real estate or a physical property We refer to everything that cannot be moved from the place where it is... Which is linked to the land either physically or legally... Are assets that cannot be moved or transferred, so they are called real estate. The term is used to talk about many topics related to the real estate market, such as, for example: Real Estate investments. Buying, selling and renting real estate. Real estate agencies. Construction of new homes. Real estate agents. Real estate taxes. In addition, the expression Real Estate is very common to see it in the media and networks, because it is one of the most searched trends when it comes to investments, as you can see it is a generalized term to talk about real estate business and covers all areas and aspects of the property market.There are four categories in Real Estate
When it comes to physical real estate; Talking about land, buildings, natural environment, property improvements and so on... They are divided into 4 categories.- Land: this is the foundation of real estate, and refers to the lots where a construction site can be developed.
- Residential: are personal or family properties that are not intended for economic activity, whether new or used.
- Commercial: are non-residential buildings intended to produce income, such as stores, offices, hotels and shopping centers.
- Industrial: these are large properties used in the production of goods, such as factories, farms, warehouses and others.
To understand how Real Estate works
We must focus on the land... From there you can understand all the possible steps and processes... To have clear the dynamics of how to make profits in a process of buying and selling... How to increase its value over time; Especially when you can build on it, some building that will generate income.That is why it is important to know what activities are allowed for such land:
- Its tenure and what land use are allowed.
- If you can develop or build real estate.
- The purchase or sale of the property.
- The rental of the property.
- The possible investments in Real Estate.
- The dynamics between buyers and sellers.
The Protagonists of the Real Estate Market
There are three: property, buyer and seller, when the three meet, the magic of Real Estate happens... That is to say, there will be a supply and demand for a property... Many more actors may intervene in this; Which are the ones that give the culmination to the act, among them:Real Estate Agents or Agencies.
Are in charge of mediating between people in the purchase and sale, rental, exchange or transfer of the property... They capture owners who want to sell or rent their property and the clients for it... They offer their advice, management and mediation, establish the conditions of the deal and make the parties negotiate to satisfaction... The difference between the agency and the agent is that this is a physical person... They are the ones who facilitate all the processes to close the deal.Investor
It is another key component in the real estate industry, everyone who buys or sells a property is an investor; to make a real estate investment many factors are analyzed, either to live in the property or to generate some profitability from it. The investor is the one who makes the market move, generating supply and demand and creating investment opportunities in the real estate market.The main ways of Investing in Real Estate
There are three main ways to invest in real estate:- Buy to later sell
- Keeping the property until it is revalued, an alternative widely used in economic crises when the price of housing collapses; but it is necessary to know the market well, and pay attention to fluctuations in prices.
- It is possible to renovate the house to add value to it, being the most common option; the property is bought cheaply, renovated and then sold at a higher price.
- Buy to rent
Some ways to use this equation when buying to rent:
- Renting the property as a home: You will obtain fixed rents every month and for determined periods of time.
- Vacation rental: It allows you to obtain high weekly, biweekly or monthly incomes; but you will depend on the season of the year and they are not fixed rents.
- Student rent: You will be able to obtain fixed earnings during the period of the year that they are in the city, which, combined with the vacation rental in high season, will give you the opportunity to obtain a better variable income.
- Invest without buying
- Real Estate Investment Funds: it is a collective investment of money in real estate; these rent through the rental or revaluation of assets, or in companies that are listed on the stock exchange and operate in the real estate sector.
- Real Estate Crowdfunding: These are projects in which a housing construction company seeks investors to finance a project and subsequently obtain profitability from it.
- Shares of Real Estate companies: Acquire shares of housing construction companies or companies related to the real estate market, obtaining profitability in the fluctuation of this market
