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Real Estate
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What Is Real Estate?
Real estate is the land along with any permanent improvements attached to the land, whether natural or man-made—including water, trees, minerals, buildings, homes, fences, and bridges. Real estate is a form of real property. It differs from personal property, which are things not permanently attached to the land, such as vehicles, boats, jewellery, furniture, and farm equipment.
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Understanding Real Estate
People often use the terms land, real estate, and real property interchangeably, but there are some subtle distinctions.
- • Land refers to the earth's surface down to the center of the earth and upward to the airspace above, including the trees, minerals, and water.
- • Real estate is the land, plus any permanent man-made additions, such as houses and other buildings.
- • Real property—one of the two main classifications of property—is the interests, benefits and rights inherent in the ownership of real estate.
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Types of Real Estate
There are five main types of real estate:
1. Residential real estate: Any property used for residential purposes. Examples include single-family homes, condos, cooperatives, duplexes, townhouses, and multifamily residences with fewer than five individual units.
2. Commercial real estate: Any property used exclusively for business purposes, such as apartment complexes, gas stations, grocery stores, hospitals, hotels, offices, parking facilities, restaurants, shopping centers, stores, and theatres.
3. Industrial real estate: Any property used for manufacturing, production, distribution, storage, and research and development. Examples include factories, power plants, and warehouses.
4. Land: Includes undeveloped property, vacant land, and agricultural land (farms, orchards, ranches, and timberland).
5. Special purpose: Property used by the public, such as cemeteries, government buildings, libraries, parks, places of worship, and schools.