What is Real Estate?
Agencies like Athens Home is what make all the complicated transactions of the buyer, sellers and investors of the real estate easier…
Real estate can be grouped into three broad categories based on its use: residential, commercial and industrial…
There are key differences in residential and commercial direct real estate investments. On one hand, residential real estate is usually less expensive and smaller than commercial real estate, and so it is more affordable for the small investor. Many thrifty small investors of modest means have increased their and their family’s fortunes by buying rental property over decades.
On the other hand, commercial real estate is often more valuable per square foot, and its leases are longer than for residential rental properties. With greater revenue comes greater responsibility, however; commercial rental real estate is more heavily regulated than residential real estate, and these regulations can be different not only from country to country and state by state, but also different in each county and city. Even within cities, zoning regulations add a layer of unwanted complexity to commercial real estate investments.
There is also increased risk of tenant turnover in commercial rental agreements. If the lessee’s business model is bad, their product is unattractive, or they are simply poor managers, bankruptcy can leave expensive real estate from generating revenue unexpectedly.
One can invest in real estate by buying residential or commercial real estate or by buying shares in real estate investment trusts (REITs) or mortgage backed securities (MBS).
Buying real estate directly results in profits (or losses) through two avenues: revenue from rent and appreciation of the real estate’s value. Rental money comes from land already developed into residential or commercial real estate. Appreciation can come from either developing raw land or from the appreciation of the area around the land you own, for instance the appreciation of real estate in some American cities due to gentrification…
What is a ‘Real Estate Investment Trust – REIT?’
A REIT is a type of security that invests in real estate through property or mortgages and often trades on major exchanges like a stock. REITs provide investors with an extremely liquid stake in real estate. They receive special tax considerations and typically offer high dividend yields.
REITs, an investment vehicle for real estate that is comparable to a mutual fund, allowing both small and large investors to acquire ownership in real estate ventures, own and in some cases operate commercial properties such as apartment complexes, hospitals, office buildings, timber land, warehouses, hotels and shopping malls.
REITs are required by law to maintain dividend payout ratios of at least 90%, making them a favorite for income-seeking investors. Many REITs have dividend reinvestment plans (DRIPs), allowing returns to compound over time.
REITs have existed for more than 50 years in the U.S. That year The National Association of Real Estate Investment Funds, a professional group for the promotion of REITs is founded. The following year it changed its name to the National Association of Real Estate Investment Trusts (NAREIT).
With the exception of a national or global recession, real estate values are affected primarily by local factors such as the availability of jobs, crime rates, school quality and property taxes.
And thus… real estate agencies like Athens Homes are built to make the process of buying, selling and investing less stressful for the clients…