To start off, it is best to define what real estate means:
“Real estate is the term used for the land along with any permanent improvement is attached. These can be natural or man-made; including: water, trees, minerals, buildings, homes, bridges and fences.”
Real estate is a form of real property; this means that such property is immovable, as compared to personal property which can be moved or displaced e.g. cars, boats, equipment and so on.
Categories of Real estate:
There are five main categories under which real estate is defined; these are residential property, commercial property, industrial property, special use building and raw land or plots.
Residential property:
Residential properties are specifically placed and built with the intent of housing people. You may have heard about popular housing schemes like Bahria Town, Gulberg, Bahria Town or DHA ; such housing projects are built predominantly provides residential spaces for living and due to their popularity and high standards are the heart of real estate Islamabad.
Such properties are often networked together in colonies, or streets. Living experience of the modern day is usually defined as being away from the noisy city life, residential properties are built at a distance from commercial or industrial areas to provide more serenity in living experience.
Commercial property:
As the name suggests, commercial properties are the ones which conduct commercial operations. They can range from a wide category. Businesses like grocery shops, to hardware and software stores, chicken and poultry shops to dairy shops, businesses like gyms, beauty parlors and spas are all falling under the category of commercial property.
Like residential properties, commercial properties are also placed together to aid the general public to a variety of commercial services when accessing these areas. Usually a well defined residential area has a smaller or more prominent commercial sector alongside so that residents of a locality can avail their daily needs at a convenient distance from their houses.
Special use property:
The special use properties include public areas like parks, graveyards, mosques and so on.
Industrial property:
This type of property falls under the intellectual property responsible for trademarks, and patents for invention. These properties are used for manufacturing, production, storage and distribution on a big scale. Take into account any factory for production of a product. These properties can also include powerhouses for production of electricity and energy as well as warehouses for storage of a product.
Plots or raw land:
Such properties can usually cover a wide range of operations depending upon what is going to be built upon it. Raw land or commonly known as plots are lone pieces of land that an investor can buy. The area that said plot(s) be located in usually have some limitations and rules to what kind of property can be built upon such land. For example a residential area may not allow the owner of the land to build a commercial shop on it. Similarly building a house in midst of a commercial region might not be convenient or allowed at all in the first place.
The main advantage investors find in plots is that they are more open to customization by the owner (in terms of how they want to build on it) and since they are not fully fleshed out, ready to use property forms, their prices are also much lower.
Characteristics of Real estate:
Amongst the most prominent physical characteristics of land are its indestructibility, immovability as well as its uniqueness. Take any piece of land, while the buildings on top of it can be altered in their shape, size or structure, the piece of land itself can never be moved or changed from its coordinates. Speaking of coordinates of a building, the main uniqueness of land comes from its geographical location as well as surrounding attributes which can never be the same as any other property on land, making every piece of real property one of a kind.
While looking over the economic characteristics of a property, we find that the total supply of land is fixed. Just like the immovability of property, few improvements or investments made onto the property are also going to be permanent. Examples of such permanent improvements include addition of water, gas and electricity lines to a house.
Speaking of improvements, within the range of legally allowed modifications, there can be a lot of improvements made on the property. Improvements outside or nearby the property can be in the form of putting up a sidewalk or pavement, and within the vicinity of a property are in the form of fencing or building upon the land. Improvements are defined as modifications that can help to increase the value of a property. Making improvements to properties is a favorable activity for real estate investors as it helps to get better profits in their business.
An important mantra in the real estate business is location, location, location. This seems reasonable once you realize the importance of location as an economic factor in the real estate business. Location of a property can be a deal maker or deal breaker in most investments. Properties located around areas of good reputation, surrounded by development and in posh neighborhoods are a lot more valuable to investors than those located in suburb, abandoned or isolated areas.
Location giving property its value and importance can vary. For example real estate Islamabad is much more valuable and desirable for investors than real estate in a rural region. Then taking perspective of the area within real estate Islamabad, people will opt for a place as well developed and structured as DHA other than going for an underdeveloped part of the city.
Working of real estate business:
People have a very varied understanding of what real estate is. Some people think it is an extremely complex industry that makes them feel quite intimidated while investing; while others tend to think it is as simple as consisting of salespersons and brokers. Infect the real estate industry is an opportunity through which many people are earning not only in sales profits but also through jobs of management, counseling, education and construction.
Real estate is working to provide for the increasing demand of property. Every now and then there are new real estate projects, which give opportunity to builders and construction professionals, the built upon property gathers a lot of market attention and brings in a lot of commercial services to be opened in a developing residential hub. This in turn gives opportunity to real estate agents and property owners to give their services or put up property for sale or rent respectively.
There are many property owners that invest into under construction projects and then sell a property on well established projects years later for a much higher price in search of profits.
Investing in real estate:
Just as a beginner’s guide we will take you over some of the most basic ways to invest your hard earned money into real estate so you can also step into the circle of real estate business. If you make smart and timely decisions and don’t back away from the work you put in on your end, there is nothing daunting or scary about real estate investment.
Renting property:
This is one of the most basic ways to earn from real estate. Renting is when a property owner takes up tenants who under a contract will pay monthly rent (monetary fee) of living or conducting commercial operations under the property. This is a great way to generate passive income. Renting comes with the costs of management and repairs that one should consider before investing into rentals.
Buying and selling:
This is one of the basic level understanding most people have about real estate business. Many individuals working in the real estate industry will buy a property in hopes of searching for a profit as they can sell the property for a higher price. Homeowners can hold onto a property and wait for the surrounding development to polish its value, or they can make improvements or modifications to the property that makes it more desirable and valuable for the market.
Conclusion:
Summing up, it can be said that real estate is a great place for business investment. There are multiple characteristics that define real estate as well as many types of property like residential, commercial, mixed use and industrial spaces which one can invest into. The true diversity of real estate comes with its diversity in terms of areas to invest and the types of investment on could make in the industry.
By the day more and more people are coming to realize the potential of the real estate industry as a business. Pakistan’s real estate development is also keeping up with the increasing pace of investors with real estate Islamabad, Lahore and Karachi being the particular hotspots that receive the most amount of attention from the public.
