The Art of Real Estate Investments - A Guide For Beginners

In this article you will learn what exactly it means to invest in real estate. If you are new in this industry, this will give you a great insight of how this kind of investment really works.

You will also learn the basics of real estate.

• Definition of Real Estate
• Real Estate Investing
• A Real Estate Investor

You can't invest in an industry that you don't know about. For this reason, you have to familiarize yourself with real estate before even thinking about any investments.

Definition of Real Estate

Real estate is a term used in legal circles to refer to any piece of land. It also refers to all the developments done on the land. This includes all the building and the fencing around the land. If there are any other developments on the land such as boreholes or water wells they are also included as part of the real estate.

However, if there are any developments on the land that are movable, they won't be considered as part of the real estate. This is because, when the immovable parts of the land are considered as part of it. If you sell or buy the land, you will get these parts.

However, the movable fixtures can be considered as property of the current owner. They can be sold or removed from the land at any given time.

Real estate is governed by a set of laws called Real estate laws. The laws govern all the Real estate. They govern aspects such as jurisdiction, purchasing and development of land.

Real estate is mainly categorized into two main divisions. There is commercial and residential real estate. Commercial real estate basically refers to the financial aspect or business aspect of real estate. It entails the buying and selling of real estate for a variety of purposes.

Under this division of real estate, there are a number of professionals. For instance, to establish the worth of the land, there is the appraiser. There is also a broker who assists in the price negotiation between the buyer and the seller. In some instances, there is the agent who helps in the buying and selling. This agent helps both parties in that, he helps the buyer to find property for sell. On the other hand, he helps the sellers to find buyers. These agents are normally licensed and in most cases are paid on commission basis. In place of an agent, a marketer may be put in charge

In this division land may be constantly developed so at to increase its value in the markets .For this purpose, there are land developers. There are also property managers who are normally in charge of managing property on behalf of an owner. They have to ensure that the property is well kept at all times.

Residential real estate normally refers to property that has been set aside for occupancy. There are many types of such properties that fall under this division. These include condominiums, apartments, family homes and town houses.

The above photo shows a picture of a beautiful house which is considered as real estate. This can either be a residential or commercial property investment. Someone may decide to occupy the house or rent it out.

Real Estate Investment

This mainly has to do with the commercial real estate. It involves the leasing, renting, buying and selling of the property. Apart from the acquisition, it also involves the ownership of the property. The main aim of this kind of investment is to make profits. For this reason, investors will develop and manage their property really well so as to ensure that they get good prices for this.

Investing in real estate is not cheap by any means. The capital to get started is normally substantial. However, there are a number of options that investors can use to enable them to invest. One of these options is the mortgage loan.

Like any type of investment, there are a number of risks involved in the investing in real estate. If one is not careful, they could easily make loses and lose their investment all together. If an investor lacks adequate cash flow, they may be forced into selling their property at a price much lesser than the actual value of the property. For this reason, to invest in real estate, you have to have adequate cash flow at all times.

Another risk involved in this investment is fraud and corrupt practices. If you are not careful, you can easily lose your money by getting duped. There are many people posing as real estate agents selling "ghost houses' or damaged property. But on other side, the profits that come with the right real estate investments are very high.

There are a number of ways to get some real estate property. For instance, you can look for market listings in order to find the properties on sale. You can also find available property by contacting the real estate agents.

Real estate property is also sold through public auctions and private sales. However, whichever method you select, you have to ensure that you search and ensure that the acquisition process is legal.

Real Estate Investor

There are two types of real estate investors. There is an active investor and a passive one. An active one is fully involved in the investment. He or she participates right from the purchase up to the point of sale. One the other hand, a passive investor hires a firm or a trust to make the investment on his behalf. The company hired is also responsible for maintenance of the property and the eventual sale.

Real estate investors select different investment opportunities for varied reasons. There are some that are drawn by the leverage and tax benefits while others are interested in the cash. There are also others who are drawn by appreciation or depreciation.

There are so many investors who have managed to make fortunes simply through real estate. This industry has very good lucrative opportunities which if well utilized, can be very beneficial.

About Author

Ahmad A. Khan is a freelance writer who has written extensively on the subject of Real Estate for a number of sites. You can also find and follow him on Google +.