Real estate is a physical asset that encompasses land and any structure that sits on it, such as houses, office buildings, apartments or strip malls. It also includes air rights above the land and underground rights below. Real estate investors may purchase properties to improve them and sell them at a profit, or they may buy and hold them as long-term investments that generate rental income. Some real estate transactions are facilitated by licensed professionals called real estate agents, brokers or attorneys.
Purchasing real estate can be an excellent investment, but it is important to research the market thoroughly and understand the terms of any mortgage loan before making a commitment. In addition, investors should be familiar with local zoning ordinances and laws that regulate what can be built on a property. Investors also should consider the potential tax benefits of investing in real estate, which can offset some of the costs associated with buying and selling property.
Many people purchase residential real estate, such as single-family homes or condos, as both a place to live and an investment. The value of a home can increase or decrease significantly over time, depending on the local economy and demand for housing. A well-maintained home can increase its value, and improvements like a swimming pool or landscaping can add to the overall appeal of a house. Investing in rental properties can be profitable, as the income generated by tenants can help cover expenses like mortgage payments, insurance premiums and maintenance fees.
The type of real estate investors buy can depend on their goals and the local market, with some buyers focusing on specific neighborhoods. For example, if you are interested in purchasing a house in Albany, New York, it is helpful to research the current home prices and how much rent other landlords charge for their rentals in the area. You can also look at data such as new home construction statistics to get a sense of the future demand for housing in the city.
A common way to purchase real estate is through a developer, a company that builds and manages residential, commercial or industrial properties. Developers typically have a team of architects, engineers, and project managers that work together to design and build a structure that can be sold or leased. In addition, developers often have a sales and marketing department that works to connect buyers with properties that meet their needs.
Individuals and companies that purchase real estate do so with the intention of turning a profit. Commercial real estate, for instance, is purchased to house businesses like restaurants or retail stores. Industrial real estate can include facilities like mines and factories, while agricultural real estate is used to grow crops for sale or consumption. Purchasing and selling real estate can be complex, but licensed real estate agents and other professionals can facilitate the process and ensure that all steps are taken to protect the interests of all parties involved.