When people hear the term “real estate” they automatically think of millionaires in suits making lots of money by selling homes, but though this is sometimes true, there are many real estate professionals who struggle with the business. This can be a factor of competition, because the idea of instant real estate millionaires becomes a double-edged sword when everyone is competing for listings and prospects. But there’s a different side to real estate, where the real money is made. In this article, we will discuss the different aspects of the real estate game, some of the players involved in it, and the rules of the game.
The term real estate can be “seen” everywhere. When you walk to your public library, when you step out of your house, when you drive through a McDonalds, you are walking on pieces of real estate. In reality, the whole world can be considered real estate, but the most profitable pieces of real estate are those in cities with great economies, where the demand is large enough for prices to rise and real estate to be valuable. For example, a piece of beachfront property on the Coronado Island in San Diego California, is many times more expensive, than a beachfront property in San Felipe Mexico. Same view, different real estate.
Inside of the game of real estate, the goal is to make money and put the property to its “best use”, meaning that a commercially zoned property should not have a house on it, and a residential zoned property should not have a mall on it.
There are buyers and sellers, which are the main players, and people in between (brokers and agents) who are seen as the “middlemen” or transaction coordinators, who find the qualified buyer and connect him or her with the seller, then take a small percentage of the sales price for doing so. These buyers and sellers can be individuals, corporations, banks, government organizations, and City Ordinances.
There are individuals and companies who do something called “fixing and flipping” where a house is bought and renovated. It may have a “cracked slab” in the garage, meaning a damaged garage foundation, which is very costly to fix, but can scare off a lot of competition. Fixing and flipping is one of the most lucrative aspects of the game of real estate and can be very profitable if done correctly and timely.
In conclusion, we briefly discussed what real estate is. It is basically all of the land that has structures on it, as well as land that has not been built on. When you buy a piece of real estate you get the rights to the airspace above you as well. There are many different avenues to make money in real estate, but most people only know about being a broker or realtor, unaware of the many different deals and transactions that make real estate a millionaire making business machine.