Real estate has several unique characteristics that affect its value. There are economic and physical characteristics. Real estate is a product that needs to be purchased, but because of the features discussed here, it is different from other products.
The economic characteristics that influence value are scarcity, improvement, persistence, and regional preferences. Scarcity is only proven in the statement that they are no longer manufactured. There is a ceiling on land supply and it is impossible to produce more land than it does now. However, this value of the supply is affected by other characteristics.
Improvements, such as buildings on a piece of land, may affect the value of adjacent plots or entire communities. If a large company is built in a depressed community, their value of life may increase as employment opportunities increase. This value has an impact on neighboring communities, which in some ways increases the value of real estate in these areas.
Permanently related to infrastructure. As buildings, houses or other buildings are demolished, infrastructure such as sewers, drainage facilities, electricity and water remain intact. Permanence can affect the type of real estate or infrastructure. If you buy a piece of land in an area that has no water, electricity, drainage or paved streets, then it is likely to be less valuable than a piece of land with a complete and developed infrastructure.
Regional preferences are the choices of people in any given area. This is often mentioned when most people refer to real estate as “location, location, location”. For whatever reason, the location of the preferred area will make the value of the home even higher. Conversely, for whatever reason, the location of a non-priority area will reduce the value of the home. The 8,000-square-foot new home on the east coast of Long Island will receive more value for its regional preferences, located next to the 1200-square-foot living house in central Long Island, adjacent to the dump.
The physical characteristics of the land represent its indestructible nature, immobility and inhomogeneity. Working backwards, we will start with non-uniformity. This simply indicates that no two packages are the same. The two plots of land may be very similar, but each plot has a different geographic location because each plot is located in a different location. This includes two lots adjacent to each other. It is important to remember that parcels are created by subdividing land, so when a 20-acre piece of land is subdivided, each individual land becomes its own independent land.
The land cannot move, so it is not moving. Even if the soil tears from the ground, a part of the earth's surface will always exist. It is important to note how this physical characteristic affects real estate law and the market. The instability of land is the reason for the localization of real estate laws and markets.
The indestructibility of land simply means that it is durable and cannot be destroyed. Storms and other disasters can damage it, but it still exists and will continue in an era of constant change and will always exist. This is the main reason why land is called a reasonable investment.
Therefore, the basic characteristics of real estate include scarcity, land improvement, permanence, regional preference, non-uniformity, non-destructibility and immobility. Please note that there is a big difference between land and real estate. Land is a part of the Earth's surface, underground and above the air. Real estate is anything related to land. Therefore, when you are looking for an investment, it is important to pay attention to the infrastructure of the area, the surrounding community and the preferences of the area or… location, location, location!Birddogbot - Real Estate Deal-finding Solution For Investors (view mobile),Click here! Real Estate Development Made Easy,Click here! Commercial Real Estate | The Cash Flow Investors Network,Click here!