Economic Characteristics Of Real Estate

Real estate is basically property consisting of the buildings and land on it, together with its accompanying natural resources like water, plants or minerals; and its value derived directly or indirectly from these resources. In layman’s terms, real estate is any property one owns that belongs to another person. That would include real estate owned by a person directly, like his personal home or his business establishment, and those held jointly by individuals or entities, like a mortgage or a partnership agreement. Real estate may also be defined as a portion of land considered as usable according to normal business rules of that specific part of the world.

One can divide the world of real estate into two categories: man-made and natural. Man-made real estate includes those constructed by man, like skyscrapers and bridges, and all the accompanying technologies required for its construction, whether by humans or machines. On the other hand, natural real estate is land that comes from nature, like forests or mountains, and is developed upon the topography. It is not entirely man-made, as many types of man-made structures also come from nature. Natural real estate, on the other hand, excludes man-made constructions, like factories.

A major portion of real estate today deals with the improvement and construction of physical structures. Most of the physical properties we see around us originated through man-made means, and over time their improvement has led to the creation of vast man-made networks of roads, sewage systems, electrical power grids, telephone and cable lines, etc., all of which have led to the modern world we inhabit today. The improvement of infrastructure around the globe has led to the opening up of vast new economic opportunities for the people of developing countries. Achieving development in infrastructure requires vast investments in terms of time, money, effort, labor, materials and technology; therefore, the development of such properties as buildings, etc., plays a key role in overall economic conditions.