Real estate is a physical commodity—something you can touch, see and live in—that encompasses land and any permanent human constructions, known as improvements. Improvements include natural and artificial-man-made—attachments to land that raise its value, such as trees, water and valuable mineral deposits.

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Although the terms land and real estate are sometimes used interchangeably, there are distinctions. The term real estate encompasses land and any permanent human constructions on it, like homes or buildings. It also includes the underlying ownership and usage rights that come with it. Land is the physical part of real estate, but it also covers the air above and the ground beneath. Anything that is permanently attached to the land is considered a part of real estate, too, including trees and mineral deposits.

Land can be used for residential, commercial or industrial purposes. It can also be owned or leased. The type of land used for a particular purpose can influence the economy of a community, especially when it comes to building and maintaining homes and businesses. Whether you want to build a charming single-family home on a cul-de-sac or have enough space for a productive dairy farm, understanding the specifics of land use can help you find the right property for your needs.

A key consideration for real estate is the cost of acquiring and improving it. For example, adding a sewer system to a piece of residential land will typically cost a significant amount of money. This type of investment will typically have a permanent impact on the value of the property, so it is important to understand its effects on the market before making a decision to acquire or develop a particular plot of land.

Residential real estate is used for living purposes, which can include mobile homes or single-family homes. This type of real estate can be owner-occupied or leased, and it is an essential component of the economy in many communities.

Commercial real estate has a business use and is usually occupied by office buildings, shopping malls or other infrastructures that serve the commerce of a community. It is an important component of the economy, and it can influence job creation, consumer spending and overall investment levels. When looking at potential real estate investments, it is important to keep in mind the current state of the economy and the type of business you intend to operate.

Rights to Use

A property owner has the right to use and develop real estate as he or she chooses. That right is enshrined in laws such as zoning ordinances, state and local laws, and contracts. Homeowners who do not understand the limits of their rights may end up in costly legal disputes with neighbors or local governments. Professionals who regularly work with property such as urban planners, construction managers and finance professionals need a strong understanding of the intricacies of property law to be effective.

Purchasing real estate is one of the most expensive and most significant investments many people will make in their lifetimes. It is also the primary form of wealth building for most families, as monthly mortgage payments contribute to equity and build wealth over time. Real estate plays a large role in the economy, as housing starts are a key indicator of economic health.

Real estate is defined as land and any natural or artificial–man-made–improvements that are attached to it. These improvements can include trees, water and valuable mineral deposits. They also include buildings and other structures such as roads, sidewalks, fences and homes. The property is usually divided into two broad categories, residential and commercial.

The primary rights of a property owner are possession, control, exclusion and enjoyment. The right of possession includes the ability to use the property without interference from others, such as the right to grow a garden, park a boat in the driveway or install a gazebo at the back of the house if it is legal under local regulations. However, homeowners need to be aware that their rights are not absolute and there are a number of restrictions and limitations on their rights, including the need to obtain a permit for some activities.

The right of control involves the ability to alter the property according to the homeowner’s wishes, such as by renovating and decorating his or her home. However, this right is subject to zoning laws that limit the size and configuration of buildings and to the requirements for construction that must be met to avoid violating environmental standards. Also, homeowners have a right of exclusion that gives them the right to refuse allowing others on their property or to exclude them from using certain areas.