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Writer's pictureMaria Chernetska

What is real estate?

Updated: Jun 8

A comprehensive guide for beginners


Real property is a legal term used to describe a person's right to land and buildings. In most cases, real property includes land and real property, as defined by local orders where real property exists. A piece of land or real property that belongs to no one is not considered real property.


Real property is generally divided into five classes: residential, commercial, industrial, special purpose and land.


All kinds of buildings belong to these categories:


Residential

Residential real estate includes all the assets that people refer to as their homes. This includes single-family homes, apartments, condominiums, co-operatives or any other kind of residence. We are talking about new construction and resale of existing houses.


Commercial

Commercial real estate covers any property used for commercial or commercial purposes such as retail stores, offices, restaurants, shopping centers, hospitals or other for-profit entities. Apartment buildings, in addition to being residential, are also included in this category in that they generate commercial income for their landlords.


Industrial

Industrial real estate includes factories, mines, oil fields, power plants, warehouses or any other asset used for the research, development, manufacture, production, storage or distribution of goods and services. Storage and distribution assets can also be considered business properties for zoning purposes.


Special purpose

Specific purpose real property includes property used by the public. In addition to publicly owned assets, such as federal or municipal buildings, parks and public schools, it also includes places of worship, cemeteries and other public spaces.


Land

With regard to real property, land refers to a large amount of property, including vacant land, woodlots or lands used for agricultural purposes, such as farms, pastures, ranches or orchards. Vacant land can be classified as developed or undeveloped land.


For the most part, a property is a common form of financial investment. The land and property that a person owns can not only increase in value, providing the homeowner with regular profits, but also provide a stable income and even financial stability.


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