Real estate is property consisting of land and the buildings on it, along with the natural resources such as growing crops, water or valuable mineral deposits. It also includes the right to control, use and enjoy that land. It can be distinguished from personal property, which is movable goods, such as furniture or appliances. Those who own real estate have inherent rights to that property and can sell or lease it or use it as they wish without interference from others.

There are many different types of real estate, and the industry is dynamic and everchanging. A solid understanding of real estate fundamentals can offer clarity to those considering investing in properties or entering the field as a broker, appraiser, attorney, developer or other professional. Must read:

Investing in real estate can be done on a small scale with the purchase of raw land or large-scale development with commercial and industrial properties. The underlying principles are the same whether you are investing in an individual home, building a shopping center or creating an office complex. A strong foundation of real estate basics can help you understand the intricacies of the market and how to evaluate the potential for profit from your investment.

The core of the real estate industry consists of brokers, developers and agents who facilitate sales and purchases of properties. Agents are licensed professionals who know the local market and can assess a property’s value, identify improvements that will increase value and negotiate on behalf of their clients. Developers buy and sell land, obtain municipal approvals and construct assets. These can be sold or leased after they are stabilized. Investors buy, sell and hold assets for long-term appreciation or income.

A key factor in the valuation of any real asset is its scarcity. There is only a finite amount of land that can be used for construction in any given location and quality. This can be further limited by environmental considerations, which may restrict development or even prevent a property from being developed at all. The availability of land also differs by region.

Unlike most other businesses, which can operate virtually anywhere, a real estate business requires physical proximity to customers and other market participants. Networking is a vital part of the job and can be accomplished through real estate events, social media platforms and community involvement. An established web presence also helps attract prospective buyers and builds a reputation as an expert in the field.

To succeed in the real estate industry, you will need to develop a diverse portfolio of properties and acquire them at favorable prices. Real estate transactions are often complex, and an in-depth knowledge of tax law, financing and regulations is essential. In addition, successful investors are knowledgeable about market trends and can recognize opportunities to buy low and sell high.