Real estate is defined as a permanent structure or land, such as a home or home improvements on land, whether man-made or natural. Real estate is a kind of real property that differs from personal property. Personal property is something that isn’t permanently attached to the land and includes boats, vehicles, furniture and related equipment.
The term real estate, land and real property can be interchangeable however, there are some clear distinctions.
Land refers to the surface of the earth and upward to the air above and is made up of minerals, water and trees. While the physical attributes of land include its uniqueness and immobility.
Real estate encompasses the land mentioned above but also includes permanent man-made structures and additions to the land such as houses, complexes and buildings. Any changes made to the real estate to improve the value are referred to as improvements. Once land is improved upon, the capital and labor used to improve the area represents a sizable and fixed investment.
Real property includes land and additions on the land as well as the rights to inherent usage and ownership.
There are 5 primary categories when it comes to real estate and these are:
This, as the name suggests, refers to any property that is used for residential purposes including family homes, townhouses, and cooperatives.
This refers to a property that is used exclusively for business such as hotels, offices, restaurants, shopping centers and apartment complexes.
This refers to property that is underdeveloped and includes vacant lands, ranches, farms and orchards.
This refers to properties that are used for production, storage, distribution, manufacturing and research.
This refers to property that is used by the public and includes government buildings, parks, cemeteries, schools, places of worship, and parks. Additionally, Operational Real Estate, which encompasses properties crucial for the day-to-day operations of businesses and organizations, such as data centers, healthcare facilities, and transportation hubs, can also be considered a subset of Special Use Real Estate.
Investing in property doesn’t necessarily mean that you have to buy a building or buildings. There are a variety of ways you can invest in real estate – be it directly or indirectly. Some of the most common ways you can invest in real estate include investment or rental properties, homeownership and even house flipping.
If you are interested in investing in property in the UK, then you can explore a wider investment portfolio to spread the risk. However, in order to do this successfully, you need to research, understand your options and of course, assess your finances.
As stated previously, property investment can be done in a variety of ways. The types of investments you can consider include:
Whichever type of real estate investment you select, you need to remember that property investing is rewarding but also comes with risk. This means it’s best to understand your finances before investing.
Property investment is a big decision and without the right risk assessments, can drain your finances as fast as it could give you returns. You need to make sure that you won’t be overreaching and won’t struggle should anything go wrong with the property or related finances. This is why you need to consider other types of property investments such as shares or even pooled funds. This offers a way to invest in real estate indirectly which comes with a lower initial outlay.
There are a variety of indirect ways to invest in real estate including:
These are just three examples of the indirect ways you are able to invest in real estate. With all of the above in mind, it’s vital to seek help from real estate professionals. Experienced real estate consultants are able to provide you with insight across a full spectrum of real estate options, guiding you on the path to real estate success. A real estate investment consultant gives investment and financial advice to those who want to buy, sell or invest in any kind of real estate property.
Gerald Eve is a firm of chartered surveyors and property consultants based in the UK, operating from nine offices with over 600 professionals. As a Newmark company, the company offers expansive reach through a global platform. The company’s mantra is that everything it does is designed to help people reach their potential, be themselves and be supported in their professional and personal lives.
Gerald Eve is dedicated to providing its clients with exceptional real estate advisory services, offering long-term relationships above short-term transactions. With expertise that cover a variety of services, from corporate real estate advisory, asset management and real estate development to property management, building consultancy and valuation, the Gerald Eve team of real estate experts will give you the confidence to make better real estate investment decisions.