Real estate is land and whatever permanent structures are attached to it. It can be purchased, sold or inherited and is a key driver of economic growth. It’s also a major investment for many individuals and companies. It’s important to understand what is real estate and how it works in order to make wise purchasing decisions and navigate the industry.

There are different types of real estate, including residential, commercial and industrial property. Each has its own set of characteristics and investment potential.

Residential real estate includes single-family homes, condos and apartments.

Commercial real estate includes strip malls, hospitals, hotels and office buildings. Industrial real estate includes warehouses and manufacturing buildings. Vacant land and land under development are also considered real estate.

The value of real estate is based on its location and the utility of the property. For example, a home in a suburban neighborhood with good schools and convenient access to shopping and entertainment is more valuable than a house in the middle of nowhere. Additionally, the type of building that’s built on a piece of land can influence its value. If a developer builds a high-rise condominium on the site of an old warehouse, the condos will be more expensive than if the developers build lowrise condos on the site of a vacant lot.

What is considered real estate varies from state to state, but generally it covers all the land and any improvements that are permanently attached to it. These include buildings, houses, fences and even the rights to minerals underneath the ground. Personal property, on the other hand, is items that can be moved from one location to another, such as appliances and furniture. Read more:

Investors and analysts monitor real estate trends to get a sense of the economy’s direction. For instance, new housing starts provide an indication of future demand for residential properties. They can also help predict inflation, which impacts the value of existing property and new construction.

Individuals and businesses involved in real estate include buyers, sellers, real estate agents and mortgage lenders. Buyers may be consumers or other investors looking to buy and hold property for rental income or flip properties for profit. Sellers, on the other hand, may be developers or investors that want to sell their assets. Real estate agents are licensed professionals that facilitate transactions between buyers and sellers. Mortgage lenders are financial institutions that finance real estate purchases, often through the use of mortgages.