Real Estate is the Real Deal.
The term real estate has been used to describe property which consists of building and land. The land could consist of it natural resources such as crops, minerals like copper or water a natural resource. Occurrence of real estate has led to setting up of the real estate business. The real estate business focuses on buying and selling property or renting out property like land and building to individuals in need of rentals or business premises. The dormant investment in real estate is fueled by te minimal risk associated with this business . The little risk associated with real estate investment arises from the fact that the business is insurable and occurrence of risks are compensated.
Real estates are constructed with the believe to be hired for rentals or for business uses. The rental real estates are meant to house families while the commercial real estates are built up to house business organization like cooperation’s and partnerships who are specifically engaged in profit generation. The only significant difference between residential and commercial real estates is that commercial real estate’s tend to be costly in terms of hire to the residential real estates. The significant difference in the cost of hiring commercial real estates compared to the residential estates arises from the difference in size as the commercial estates are significantly large in size. Another difference between the two occur as the commercial estates are heavily regulated by the law while thee residential estates are not regulated by the law. These regulations are never constant but they vary from country to country and even from region to region depending on the region the commercial estate has been constructed.
The process of investing in real estate is initiated by the acquisition of real property like land and building from a selling personnel. Apart from directly buying land or parcels of land, one can also initiate the investment process by buying shares in real estate firms or mortgage backed security firms. The profits realized by investment in real estate comes from the amount received from thee rent or lease of the given property or by appreciation of the property one holds as real estate. The second profit which arise from real estate investment which revolves around appreciation in the value of real estate is only recorded in land and not only buildings. Land as a resources appreciates in value while its counter partner building is subjected to depreciation. Appreciation is a term used to describe how properties gain value over a given duration. Depreciation has been recorded to occur in buildings, vehicles, furniture and electronics. Occurrence of appreciation is the most common method to make profit from real estate.