Real Estate – Everything You Need to Know
Real Estate investing is a lucrative but complicated business. Investing in Real Estate involves more than buying a piece of land, building a house, renting it out, and getting your name on the deed. In the investment world, Real Estate is the property consisting of the actual buildings and land on it, and its accompanying natural resources like water, minerals or vegetation; or an interest credited to it, in which a person receives a royalty for the use, enjoyment, and disposal of the property. A Real Estate Investment Trust, also known as a Real Estate LLC or a Reverse Trust, is an agreement that allows investors to benefit from the appreciation in the value of a particular property by means of transferring funds held in an account.
There are three major types of Real Estate investments: land, structure and infrastructure. Most Real Estate transactions consist of one of these three. Land includes: a) real estate in undeveloped land, b) vacant land, c) home land held by a homeowner as a mortgage, d) land held by an absentee landowner and e) land owned by public authorities such as parks, forests or other natural or man-made places of public use. Structure can be comprised of ) buildings that consist of apartment complexes, condominiums, townhouses, group houses and mobile homes, and that include retail shops and strip malls, and that include an attached garage, and that include other structures such as parking garages. And, infrastructure includes c) roads, airports, railroads, bridges, pipelines, and other similar installations. All other types of Real Estate are basically Real Estate mixed with other types of intangible assets and other underlying commodities.
So, how do you invest? The most common way to invest in Real Estate is through acquiring “active” Real Estate – that is, something that is not owned by anyone, but instead is being utilized and appreciated by people. A great example of active Real Estate is vacant land (as described above), which can be developed into rental properties. Another common way to invest in Real Estate is through buying “passive” Real Estate – that is, something that is under constructions and therefore not yet occupied, but is only sitting there like a vacant lot or other sort of unused building. And, the third way to invest in Real Estate is through buying “indirect” Real Estate – that is, something that is under construction but for one reason or another is still being developed (for example, the renovation of a public building).
So, what can you do with this indirect Real Estate? You can purchase residential properties, either individual homes condos, duplexes, or townhouses, and you can also purchase vacant land or large blocks of land. You can build single-family residences (for yourself, your family and loved ones), multiple-family dwellings (for renting to others), hotels and resorts, office buildings, industrial centers and more. You can even construct and/or manage a commercial real estate portfolio.
To purchase Real Estate directly, from the developers, you can either purchase a deed in lieu of an outstanding loan, meaning that you get to leave your existing mortgage payments intact, or you can purchase an interest in a property. With an interest in a property, you can buy buildings either permanently attached (which means that they are permanently attached to the land), or you can buy smaller parcels of land that are less than a mile square. With a deed in lieu of an outstanding loan, you will receive the full amount of the loan plus any interests or fees. With an interest in a property, you will receive the full amount of the loan plus any interests or fees.
There are many other ways to make money through the purchase of Real Estate, and each method has its own advantages and disadvantages. For instance, purchasing Real Estate in a town or city is easy because you have access to a multitude of resources. For example, you can find real estate owned by someone who needs to sell, and who wants to have their property paid off quickly. You can also find properties that have been foreclosed on or are in need of renovation. Many people buy these types of properties in order to build equity and make money by renting out their properties.