Real estate refers to property comprising land, the buildings on it, the air and space above it and everything beneath it. The term ‘real estate’ includes all natural resources in, on or attached to the land such as water, minerals, farmed crops, or uncultivated flora and fauna; and immovable property of any nature, including appurtenances, fences, fixtures, structures, utility systems, walls, improvements, roads, and sewers.
Real estate is a legal term commonly used in jurisdictions where the English common law forms the basis of the legal system, such as India, the United States, the United Kingdom, Canada, New Zealand, Pakistan, and Australia.
The title to real estate would normally include title to surface rights, mineral rights, and air rights which may be bought, sold, leased, or transferred separately or together. The business of real estate is the profession of renting, buying, or selling, houses, buildings, or land.
The term, real estate, was first recorded in the 1660s when it was used in the legal context to refer to immovable property. The term real estate means physical, or real and is derived from the Latin root word ‘res’, or things. Others believe it is from the Latin term ‘rex’ or royal, because in earlier times, ownership of land came with exclusive rights. Initially, the Constitution of the United States conferred voting rights only to those who owned real estate.
Real estate is more generally used to denote residential buildings but is not limited to this context. It may be categorised into four types including residential, commercial, industrial, and land.
Residential real estate refers to property which is lived in, with examples including townhomes, condominiums, high-value homes, triple-deckers, coops, vacation homes, duplexes, and others. They may be structures designed for a single family or multiple families and are restricted to occupation or non-business uses. Residential real estate may include resale homes or new construction homes. The most common category is considered to be single-family homes.
Other than physical type, residential real estate may be classified according to how they are connected to land and neighbouring real estate. For instance, connected properties may be owned by a single person or entity, or owned by different parties with an agreement specifying the relationship between units and common areas. Some of the more common categories of residential real estate in Europe and North America are:
A single-family house refers to a building used and maintained as a single dwelling unit. Most single-family houses are built on lots with a larger surface area than the building itself. This creates an area surrounding the house which is often called a yard in North America or a garden in the UK.
An apartment building or block of flats is a multi-unit building containing individual units called apartments or flats. Apartments are of different types and often occupy multi-storey buildings.
A terraced house is also called a rowhouse or townhouse and refers to a number of multi-unit or single buildings built in a continuous row. The houses have no intervening space between them and are joined by their side walls, or in rare cases, their back walls.
Often shortened to condo, a condominium is a type of residential building which is divided into several units, each owned separately. Within the complex, there are common areas which are shared and owned jointly. There are also townhouse style condominiums.
Commercial real estate refers to property where business is conducted, with examples including warehouses, retail store buildings, hotels, and office buildings. In some cases, a business would own the building it occupies, but it is more common to see businesses renting a building or office space to operate from. In in the United States, commercial real estate is categorized into different classes. For instance, office space is divided into the following:
Industrial real estate is used for industrial purposes, with examples including factories, farms, and mines. An industrial building would normally be used for production, distribution of goods, storage of goods, and research. While industrial property may be considered commercial real estate in some cases, the sales, construction, and zoning are handled differently.
Industrial real estate may come in different sizes and shapes, covering a large range of business types. Industrial properties can be generally categorised into three sizes including enormous, large, and small.
Enormous industrial properties are often used as distribution and logistics centres used to hold and then distribute finished products directly to customers or to stores. Large industrial properties are medium to large factories and warehouses designed to store or manufacture goods. They may also be distribution companies like third party logistics.
Small industrial sites may include double-storey or single buildings zoned for industrial purposes. Often, these types of buildings will have flexible interior space which is normally a mix of office space and warehouse. Spaces like this are often used by small businesses such as start-ups, research laboratories, and mechanics.
Land refers to property such as ranches, working farms, and vacant land. Land is often subdivided into early development or reuse, site assembly, subdivision, and undeveloped. Land in transition or early development stages may include military bases and tracts set aside for a specific development purpose.
Subdivision and lot wholesale land would normally refer to a stretch of land purchased as an undeveloped tract and resold as subdivided lots after roads, utilities, and other infrastructures have been installed.