Understanding real estate basics will help you get a jump start on owning real estate or creating a real estate business. Real estate can be a tremendous tool for building wealth, increasing net worth, and creating income.
Navigating the world of real estate can be intimidating. Millionacres is here to help you learn more about investing in property, navigating taxes, buying real estate stocks, and more.
This road map will help you understand real estate basics whether you're buying your own home, an investment property, or starting a real estate company.
Why real estate?
As a real estate agent, you can create a career and business out of helping others buy and sell real estate. You can invest in real estate for cash flow or income or create a management company to handle others' real estate investments. As a homeowner, you can boost your net worth or build wealth over the long term.
Real estate has several benefits. It typically appreciates, or increases in value, over time. It can be leveraged, meaning you can borrow against the equity you build over time. And investment properties and real estate businesses open up a number of tax advantages.
Types of real estate
There are three main types of real estate -- residential, commercial, and land. You can buy or invest in any type of real estate. What you want to get out of real estate will determine what type of real estate to target.
Residential real estate, like a single-family home, condo, or townhome, is a common starting point, especially for home buyers. Commercial real estate and land are often purchased as investments. Some types of residential real estate, like single-family fix-and-flips, duplexes, triplexes, or fourplexes, can be purchased as investments, too.
The cost of real estate varies greatly. There are several factors, like property location, size, features, or current and potential rental income, that determine the value of real estate.
Land and residential real estate are often cheaper than buying commercial property. As an investor, you have the opportunity to make more money in commercial real estate, but you also need more money to participate. As an agent, you can target commercial or residential real estate, although your commission will typically be much larger as a commercial broker.
Continue to explore the different types of real estate and think about which of the three types of real estate is best for you.