Real estate is property that consists of land and the buildings located on it, as well

as natural resources like growing crops and minerals. Unlike personal property,

which includes cars and jewelry, real estate cannot be moved without damaging it.

Real estate can be used as a source of investment and it is commonly divided into

five main categories: residential, commercial, industrial, vacant land, and special


The real estate industry is made up of people who work as brokers and agents,

developers, appraisers, investors, and support staff. Brokers and agents act as

middlemen between buyers and sellers, while developers buy land to construct

properties for sale or rent. Appraisers are responsible for valuing properties.

Investors can put their money into real estate directly by purchasing property, or

indirectly through REITs (real estate investment trusts), real estate mutual funds, or

exchange-traded funds.

Residential real estate refers to any place that is used for housing, including single family

houses, condominiums, cooperatives, townhouses, duplexes, and three-story

apartments. The most popular type of residential real estate is single-family homes.

Other types of residential real estate include land and buildings used for vacation

homes or rental properties.

Commercial real estate refers to any place that is occupied by businesses, such as

hospitals, retail centers, warehouses, and office buildings. The most popular types of

commercial real estate are retail stores and office buildings. Industrial real estate

refers to any property that is used for manufacturing, production, and storage, such

as power plants and factories. Vacant land or raw land is any land that does not

have any permanent structures built on it.

Whether you’re a homebuyer or an investor, the real estate industry is complicated.

To make sense of it, you need to understand the different types of real estate and

their characteristics. The seven key characteristics of real estate are scarcity,

improvements, location, investment permanence, immobility, uniqueness, and



Scarcity: Real estate is limited and valuable because there are only so many

buildings, houses, and other structures that can be built on it. This is why real estate

is a highly sought-after investment opportunity.

Improvements: When someone improves real estate, they add value by making

changes that increase the utility and desirability of the property. These

improvements may include installing a new bathroom, adding a deck, or remodeling

a kitchen.

Location: The most important characteristic of real estate is its location, which

affects the price of a property. Because of this, the same property in a different

geographic area can have very different values.

Immobility: Although one can relocate dirt and land, a property’s location is

permanent and will never change. This also makes real estate a very secure

investment because it is difficult for a buyer to steal or move the property.

Uniqueness: Every piece of land is unique and no two pieces of land are alike. This is

why real estate is such a desirable commodity because it offers investors the chance

to build something that will be unique and stand out from the rest of the market.