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Real Estate

Additional Resources

  1. Chapter 2 Basic Real Estate Economics []
  2. 11.433j / 15.021j Real Estate Economics []
  3. Lecture Notes []
  4. Urban Economics And Real Estate Markets: 9780132252447 ... []
  5. Humboldt Real Estate Economics []
  6. Fisher Center For Real Estate And Urban Economics []


Real estate is "property consisting of land and the buildings on it, along with its natural resources such as crops, minerals or water; immovable property of this nature; an interest vested in this an item of real property; buildings or housing in general. Also: the business of real estate; the profession of buying, selling, or renting land, buildings or housing."

Real Estate

Any property that consists of land and everything and anything on that land falls under the category of ‘real estate’; with that definition in mind the buildings that we have on land, and the resources of the land—including all the gardens, parks, ponds farms, etc. that maybe there—will be considered as Real Estate. This may be a little new for some people because often times advertisements portray Real Estate to be something which only comprises of residential living spaces and nothing else.

Categories of Real estate:

Real estate can be classified into two broad categories:

  • Residential Real Estate
  • Commercial Real Estate

Residential Real Estate:

This category includes land (developed and undeveloped), townhouses, condominiums, houses, apartments or flats etc. Basically, any type of property where a single family, or multifamily structures are residing. The property that falls under this category is available for non-business purposes as well as for any occupational purpose.

Commercial Real Estate:

This includes real estate which is used for commercial purposes like office buildings, shopping malls, warehouses, etc. Any building that has been constructed or a piece of land that is intended to generate money (profit) from either putting it on rent or from capital gain will be considered commercial real estate property.

Commercial real estate is further divided into three types:

  • Office
  • Retail
  • Industrial

Office real estate would be comprising property where there are proper offices set up. Retail real estate would include shopping malls, markets, plazas, etc. Lastly, property that is being used for industrial purposes like farms, mines, industries or factories, mills etc would fall under industrial real estate.

Investing in Real Estate:

Plenty of people invest in real estate by either buying pieces of land or by using the option of real estate investment trusts (REITs). After having invested particular amount money to buy any piece of land that somebody may be interested in, they get to become the owners of that property. Later on, they may use that piece of land to build something of their own, or even sell it to someone else at a higher rate. Plus, investing in real estate involves less risk as compared to the kind of risk which is involved in stock markets, for example.