The term “real estate” means real or physical properties. Real estate deals with buildings, properties, pieces of land, air rights above the land, and underground rights below the land. However, the real estate business refers to producing, buying, and selling property.
Definition of real estate
Your home, an empty plot of land purchased by you, the skyscraper in a metropolitan city, or even a patch of desert that cannot be used to erect buildings – all of these are considered real estate.
Real estate refers to the plot of land and any other tangible developments situated on or underneath it. The developments may include a whole building, a tree on the lawn, or a roadway. Septic tanks built underneath the ground are also considered real estate.
4 Main Types of Real Estate
Investing in real estate in Montgomery County real estate can sometimes be confusing as there are countless options knocking at your door and the sum of money involved is enormous. If you’re new to this, it is important to know the four main types of real estate you can work with and understand how they work. After you finish reading this section, you can determine what will work best for you. So, here are the four kinds of real estate you’ll commonly find in Montgomery County:
1. Residential
As might be expected, the residential real estate in the United States is immense. It was stated in the World Property Journal that the total value of the housing market hit $33.6 trillion in 2021 which is more than the annual GDPs of the U.S. and China combined. The residential housing market in the U.S. has grown more than 50% in the last 10 years. In this category of real estate, you can invest in the following kinds of residential properties:
- Sing-family homes
- Cooperatives
- Townhouses
- Large condominiums
- Multiplex houses
- Mobile houses
You can take the help of real estate agents, Multiple Listing Service (MLS), Zillow, Redfin, Craigslist, and various other websites dealing with real estate to find residential properties.
2. Commercial
Exquisite office properties in Rockville and world-class shopping centers in California are some examples of commercial real estate. Recently, the size of the U.S. commercial real market was valued between $14 trillion to $17 trillion which is about half the valuation of the residential market.
The reason why the commercial market is smaller than the residential market is that everyone needs a house to live and the priority of shops and stores comes second.
A property that is used for business purposes can be termed commercial real estate. Those kinds of properties include:
- Large office buildings
- Small and large suburban office parks
- Fast food outlets
- Strip malls
- Apartment buildings
- Leisure and hospitality property
- Grocery stores
- Gas stations
- Movie theaters
- Garages
- Parking lots
Due to the amount of investment involved, oftentimes commercial real estate is not listed for sale publicly. Real estate firms that specialize in commercial real estate deal directly with buyers, sellers, institutional investors, and lenders.
3. Industrial
Although industrial properties could have been also considered as commercial real estate, they are not treated the same due to various reasons. Industrial property is used in a different way than commercial properties and they also have a different set of rules and legal procedures. The following premises are considered as industrial real estate in Montgomery County:
- Production facilities
- Food processing centers
- Refrigerated storage facilities
- Manufacturing sites like the Tesla factory in Fremont
- R&D parks like the Research Triangle Park in Raleigh-Durham
- Power plants
- Solar power generating stations
- Datacenters for giant tech companies like Google and Meta.
4. Vacant Land
You can buy a piece of vacant or raw land to develop it in the future. Some also purchase vacant lands for natural resources rights such as mineral, water, or air rights in urban areas. As taxes and maintenance costs are very low when compared to other forms of real estate, many consider investing in unoccupied lands a good long-term strategy. Real estate vacant lands in Montgomery County include:
- Any undeveloped land
- Recreational sites used for fishing, camping, or hunting.
- Farms
- Ranches
- Orchards
- Timberland
- Planned urban development for residential or commercial development
