Information Real Estate

Skyscrapers and various towers around the world shows one story of success for past few years, and it is the running-strong achievement of Real Estate. Now we always use the word Real estate or realty. But do we all really know the meaning?

What is real estate?

The term Real Estate is a legal terminology that emphasizes about the inherited natural land or properties including houses, sewers, plants etc., which man further improvise to make it a liveable space for unstoppable popularity of the entire world. It usually goes in contrast with personalty or personal property or chattel.

What is Real Property or Realty?

Real property or Realty often serves the purpose as the synonym of Real Estate.

Distinguish Between Real Estate and Real Property:

For a layman, it may be the synonym. But from technical point of view it is further differentiated in terms of

  • Real Estate being the matter of land and their fixtures

  • Realty being the right of ownership over real estate
  • What Law says about Real Estate?

    Statutory Law defines Real Estate with few legal terms and rights. It expresses that Real Estate is not only the matter of land; it also encompasses mineral or machinery right attached to it. Further, it includes that the property owner has to submit property tax return to the tax office.

    In a Nutshell

    We can exaggerate the term Real Estate as the land and all its fixtures affixed with it including minerals, gas. coal, machineries, trees, sewers etc, and all the right on it, and the compulsion of paying tax on that property.

    Types of Real Estate and Real Estate Profit & Loss

    Before investing on any home, office, land or any property one should focus on the property one is investing in. There are different types to categorize Real Estate for our benefit. Below is the gist of the profit and Loss associated with each type:

    1.Rental House:
      Profit: It is the most common and easiest way to roll on with the Real Estate as it will provide long-term business satisfaction.

      Loss: We are always loath to deal with landlord, so it can give you the pain of waiting for big-return.
    2.Rent -to-own-house:
      Profit: After buying the house, you have the facility to sell by rent-to -own arrangement. Here buyers bear the maintenance cost, and you can earn higher profit from it.

      Loss: You need to tactfully deal with the tenant as most of the time buyers have the tendency to ignore the purchasing work done.
    3.Boarding Houses:
      Profit: Here your profit can sometimes be your loss, and vise versa. As in this case, you can provide a room of a house as a rent to the college-goers or for single-office-goers.

      Loss: Renting only a room to a young college-student can be never-ending headache to you.
    4.Low-income rentals:
      Profit: Other terms are like any other rentals but with higher cash return.

      Loss: Similar like other rentals but with the hassle of more maintenance, repairing and tenants problem.
    5.Commercial Real Estate:
      Profit: Nowadays it is very encouraging field of Real Estate as it pays high return with the facility of long term triple-net leases and without much management involved.

      Loss: You have to face strong contender, and even one vacant storefront can lead you to great loss at a year time
    6.Fix uppers:
      Profit: If you have creative bent of mind, then this is the work for you. It pays quick and easy return.

      Loss: Many risks are involved and after gaining profit you have to pay very high tax.
      Profit: If have good eyes for future of the property, then it may give you good return. As starting with low during the growth and keep patient until the value rises would fetch you good cash in your pocket.

      Loss: Long waiting time may break your patience and expenses on transaction cost may not fetch you good profit. This deal is little unpredictable.
    8.Buy land, then sell after splitting it:
      Profit: This simpler deal can fetch you good return.

      Loss: Without the cash flow you may have to wait for a long time with huge expenses.
    9.Buy and live in it and then sell it:
      Profit: According to the tax-law, after fixing it up and then selling it after two years you can gain the benefit of a tax-free profit. Then you can start up with the same process once again.

      Loss: It will make you loathsome by the act of frequent moving.
    10.Buy for cash sell for terms:
      Profit: You can earn good cash by paying good cash here. It can yield you good return and interest by selling it in easy terms.

      Loss: You deal with your capital in the long term basis.