Real estate properties

Real estate has many unique characteristics that affect its value. There are economic characteristics and physical characteristics. Real estate is a commodity that can be bought, but it is different from anything else because of the characteristics discussed here.

Economic characteristics that affect the price are scarcity, improvements, sustainability and environmental preferences. Lack is easily seen in the saying, “They are not creating anything anymore.” The land supply has a ceiling and cannot be produced more than it is today. This supply price is influenced by other characteristics.

Improvements such as buildings on a piece of land can have an impact on the value of neighboring parcels or the entire community. If a large company builds in a certain depressed neighborhood, the cost of living will increase as a result of the startup. This price will affect the neighboring communities, so that the real estate prices in these areas will increase in some ways.

Sustainability is related to infrastructure. When buildings, houses or other structures are demolished, infrastructure such as drainage, electricity and water remains intact. Sustainability affects the type of real estate or infrastructure. If you buy a piece of land in an area with no utilities, drainage, or paved roads, it will be worth less than land with intact infrastructure.

Local elections refer to the choices of people in any locality. This is what most people call “location, location, location” when talking about real estate. The location of a chosen place, for whatever reason, is what increases the values โ€‹โ€‹of the houses. Conversely, a non-preferred location is one that, for whatever reason, lowers housing prices. 8000 square foot brand new homes on Long Island Beach, East Hampton will be worth more because of their neighborhood choices, than 1200 square foot starter homes in downtown Long Island, right next to the dump.

The physical properties of the land represent its imperishable nature, static and non-uniform. Working backwards, we’ll start with the non-homogeneous. This simply means that no two packages are identical. Two parcels of land may be very similar, but each parcel is geographically different because each parcel is in a different location. This includes two lots next to each other. It is important to remember that parcels are created by dividing land, so when a large plot of 20 hectares is divided, each individual will have his own land.

Earth cannot be moved, so it is immobile. Even when soil is torn from the earth, part of the earth’s surface always remains. Here it is important to note how this physical feature affects real estate law and markets. Land immovability is the reason real estate laws and markets are inherently local.

The indestructibility of the land means that it cannot be destroyed easily. It can be damaged by storms and other disasters, but it remains and changes with the changing times and will always be there. This is the main reason why this land is said to be a good investment.

Therefore, the basic characteristics of real estate are scarcity, land improvement, sustainability, environmental choice, non-homogeneity, indestructibility and immobility. Please note that there is a big difference between land and real estate. Land is the surface of the earth, the subsoil and the air. Real estate is anything related to land. So when looking for investments, keep in mind the local infrastructure, local neighborhood and local preferences or… location, location, location!

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