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Real estate defines the land a person may possess which includes buildings, structures as well as the natural resources on the land. Since time immemorial land in all its varied forms has exercised a fascination for man, to own it, tend it and eventually identify yourself with it. Land in the form of agricultural fields, privately held land for residential purposes, later on for industrial or commercial purpose, for rentals or ownership continues its hold, even in this age over normal people’s lives.
Buying a property as a primary residence is a milestone in a person’s life and is also the single largest investment he can make. The buying and selling of property as a business investment is quite an old practice, but since the past fifty years or so real estate investment is treated as a prime case of capital budgeting by using state of art investment analysis and major technological advances to predict the income streams it may generate along with the associated risks
Real estate investment is essentially long term in nature and investment professionals insists that an investment portfolio should have at least 5%-20% investments in real estate.
A home is a primary real estate investment, it serves the dual benefit as an anchor of one’s existence and also over the years its value appreciates. It provides both emotional and financial benefits.
Interest in real estate is of two types:
Ownership interest:The investor is entitled to full ownership of the property. He assumes all the risks and responsibilities of a landowner such as repairs, losses due to natural calamities and payment of all taxes. If you own a home you have ownership interest.
Leasehold interest: exists when a landowner passes on some of his rights on to a tenant in exchange for a payment of rent. If you rent out a property you have leasehold interest in the real estate.
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