What is 'Real Estate'

Real estate is property comprised of land and the buildings on it, as well as the natural resources of the land, including uncultivated flora and fauna, farmed crops and livestock, water and mineral deposits.
Although media often refers to the "real estate market," from the perspective of residential living, real estate can be grouped into three broad categories based on its use: residential, commercial and industrial. Examples of residential real estate include undeveloped land, houses, condominiums and town houses; examples of commercial real estate are office buildings, warehouses and retail store buildings; and examples of industrial real estate include factories, mines and farms.


Classification of Properties under Real estate

1.  Residential                  2. Commercial                     3. Industrial


BREAKING DOWN  'Real Estate'

Real Estate, Personal Property and Real Property

Real estate is a special instance of real property. Real property, a broader term, includes land, buildings and other improvements – plus the rights of use and enjoyment of that land and all its improvements. Renters and leaseholders may have rights to inhabit land or buildings that are considered a part of their personal estate, but are not considered real estate.

Personal property includes intangible assets like stocks, bonds and other investments; it also includes chattels, like computers, furniture and clothes, as well as fixtures like a dishwasher, even if you are renting a home (provided you bought and installed it with the lessor's permission).

Land that has no owner, e.g. land in certain regions Antarctica or on the moon, is not considered real estate.

• Personal/Home Ownership

Home ownership, also known as owner-occupancy, is the most common type of real estate investment in the country today for residential purposes. According to the National Multifamily Housing Council, roughly two-thirds of residents own their home. Often, they have financed the purchase by taking out a particular type of loan known as a mortgage, in which the property acts as collateral for the debt.

Individuals shopping for a mortgage to invest in real estate in the form of an owner-occupied home are faced with a variety of options. Mortgages can either be fixed-rate or variable-rate. Fixed-rate mortgages generally have higher interest rates than variable-rate mortgages, which can make them more expensive in the short run. Fixed-rate loans cost more in the short-term because they are protected from future interest rate increases.
To the best of my knowledge just few banks operate mortgage service in Nigeria.

• Commercial Real Estate

Buying or leasing real estate for commercial purposes is very different from buying a home or even buying residential real estate as an investment. Commercial leases are generally longer than residential leases. Commercial real estate returns are based on their profitability per square foot, unlike structures intended to be private residences. Moreover, lenders may require more money for a down payment on a mortgage for commercial real estate than for a residence.

There are key differences in residential and commercial real estate investments. On the one hand, residential real estate is usually less expensive and smaller than commercial real estate and so it is more affordable for the small investor.