The real estate business is about making deals regarding properties. The property consists of land and the buildings on it, the other natural resources in that land like crops, water, etc. also come under the property.
Real estate is different from personal property; personal property is the things that are not attached permanently to the land like furniture, jewelry, vehicles, farm equipment, etc. There should not be any confusion between real property and personal property.
Types of Real Estate
Here are the various types to choose from…
1. Residential Real Estate
These are the properties that are used for residential purposes. Duplexes, townhouses, condos, cooperatives, family homes, multi-family residences, etc are included under the same umbrella.
2. Industrial Real Estate
These properties are used for industrial-related activities such as manufacturing, production, storage, distribution, and research and development. Examples of industrial real estate properties are warehouses, factories, and power plants.
3. Commercial Real Estate
These are the properties used for business purposes and are called commercial real estate properties. This includes hotels, offices, grocery stores, medicine stores, gas stations, restaurants, stores, shopping malls, and film theatres.
These are vacant fields, agricultural farms, orchards, underdeveloped properties, etc.
What is a Real Estate Business?
A real estate business does not include only brokers and salespeople. The business is much more diversified than you can imagine. Money can be earned through several aspects. There are income options like financing, construction, counseling, education, property management, etc. Many professionals earn their living by real estate business, such as accountants, architects, and lawyers.
Money can be made from revenues after you buy a property – from the rent or leases.
Real estate investment via Gatsby keeps your investment safe and secure. They protect the investment from factors that could affect it such as the location of the property, employment rates, crime rates in the area, transportation facilities, quality of schools, taxes, and municipal services with much ease.
Why Real Estate is Considered a Great Investment
There are 5 key reasons…
1. Has A Predictable Cash Flow
Cash flow is referred to as the income derived from the investments after paying all the operating and mortgage costs. A healthy real estate investment should give around 6% or more in cash flow.
2. Real Estate Leverage
Leverage is considered the most important advantage of real estate investment. The borrowed capital that is used to increase the possibility of high returns of an investment comes under its application.
3. Real Estate Is Improvable
After buying your property you can make changes accordingly, you can make repairs, and have additions. You can hire someone to do it, this will boost the value of the property. Hence, getting more profit when selling.
4. Tax Breaks And Deductions
Real estate investors have the luxury to use the tax breaks and deductions. These can save a lot of money by deducting the cost of operating, managing a property, and owning the property.
Real estate investors generally make money through rental income, selling of properties, and appreciation. Values of real estate properties are expected to increase over time, selling them at the best time can get you a huge profit.
5. Building Equity And Wealth
After you pay down a property mortgage, you create equity. This equity is a part of your worth. With this increase in equity, you will have more leverage to buy more real estate properties.
Real estate investment may have a lot of benefits but it also has its drawbacks. It is not a liquid asset as it will take some time to get cash from them. Real estate transactions can take months, even with the help of a broker. Still, real estate is considered one of the best investments in the market.
Note: This article originally appeared at MoneyMiniBlog.