Real Estate

The Basics of Real Estate

Real estate refers to land and buildings on it, as well as natural resources like crops, minerals or water. It may be owned by individuals, corporations or government institutions.

Real estate investing, buying, selling and investing can be a rewarding venture for those with the right skillset and resources. Before making your purchase or starting a new business in this arena, there are a few things to consider: If this is your first home purchase or you plan on entering into the industry as an investor, here are some things you should know before diving in.

The Fundamentals

There are four primary categories of real estate: residential, commercial, industrial and land. Each has its own advantages and drawbacks so it’s important to understand each one before beginning your search for properties.

Residential: For those just starting out in real estate, residential is the most commonly understood form. This category encompasses homes used either for living in or as investment properties such as single-family homes, duplexes, triplexes, townhouses and condominiums.

Residential real estate offers the biggest advantage in that it’s often an affordable entry point into the industry. While you must incur some upfront costs, rental income will help cover expenses and provide you with extra capital to grow your portfolio.

House flipping and rehabbing also provides the potential to make money. This is an excellent way to gain experience in the industry and learn how to effectively manage your portfolio.

Commercial: Similar to residential real estate, this type of land is used for business purposes and may contain offices, factories and warehouses. It could also contain land that houses farms or ranches.

Investing in commercial real estate can be rewarding if you’re willing to put in effort and wait. But before making a purchase, do your due diligence and research how much you can afford for the property.

Before selecting a real estate agent, it may be beneficial to speak with several. This will give you the opportunity to compare their services, business style and reputations.

You should ask each agent about their experience and how long they’ve been in the industry. This will give you a good indication of their level of expertise, helping you decide who best meets your requirements.

Another important note is that you don’t necessarily need a college degree to become a real estate agent. A high school diploma or GED certificate could be all that’s necessary to begin your journey in this field.

Foreclosures: Consult with your local real estate agent to see if there are any foreclosures in your area. These properties tend to be cheaper than average houses, but they come with a high risk since they’re sold “as-is” and must be paid for with cash.

Off-market Real Estate: Off-market real estate is becoming more and more popular, offering buyers and sellers an opportunity to strike a deal without the stress of having to negotiate. Online marketplaces like Roofstock provide a selection of properties for sale by private owners.

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