During our childhood, we were taught about the three basic essentials of life, FOOD, CLOTHING, & SHELTER. These are the basic requirements of any human, rest are just add-ons to make life as comfortable and easy as it can get.
Change is life, we evolve every day. It’s the way life functions, the modern day humans have evolved from homo sapiens, so has our modern lifestyle. Real Estate is an essential part of our modern day life and it has evolved with time. Real estate is a part of our life at every juncture, starting from the house we live in, offices we work in to the mall we shop in. Real Estate has evolved over the centuries from living in caves to living in skyscrapers.
Now real estate has evolved many folds, in order to get a better understanding of real estate, one needs to understand the broad categories of real estate. Real estate is primarily used for two main purposes to live in or to do business. So the two broad categories of real estate are:
- Commercial Property
- Residential Property
Commercial property in itself has multiple categories, it starts from an empty piece of land zoned for commercial use, or an existing commercial building for offices, shops or buildings.
Commercial property in itself is quite complex, as it has multiple factors which lay down the valuation parameters. Few of the parameters which are broadly taken into account in the valuations of a commercial property are:
- taking into account the income the property can generate
- The location of the project and audience it caters to
- The historical revenue
- The future prospects & growth of the area and adjoining areas
- cash flow with owner perks removed and many more…
As far as commercial properties are concerned there are of many types such as, office buildings, shopping malls, supermarkets, hyper markets, hotels, resorts, restaurants, banquets and more. Though commercial properties have many more complexities to cater too, the income from them is good in the long run. It’s like a fixed deposit which not only grows in terms of valuation but also gives you interest along with the growth.
Commercial properties are good opportunity to convert your hard earned money into fixed assets with good returns. Commercial property can be broadly divided into various broad categories:
- Offices (Office spaces virtual/lockable)
- Leisure (Hotels, Public houses, restaurants, cafes, sports facilities
- Retail (retail stores, shopping malls, shops
- Industrial property, office/warehouses, garages, distribution centers
Residential properties are by far the the most popular investment option across various consumer segments. They can be defined as a structure that is used or is suitable for use as abode. Residential property can be divided into different variants
Farm Houses and more
They can further be sub divided into more categories like condominiums, separate homes, duplexes, high value homes, vacations homes, etc. There’s plenty to go around.
In residential property one needs be careful, and a lot needs to be kept in mind which often can be a confusing and daunting decision for someone relocating. Therefore, there are many parameters which needs to be looked into before deciding a residential property like neighbourhood, proximity of schools, healthcare facilities, shopping environments, restaurants and nightlife, work commute and all other aspects of their housing environment, the process of selecting a residential location can become very overwhelming!
“A better shelter is for Better Life”
The above blog is from a macro perspective of Real estate, in the next blog we will deep dive at a micro level.
The blog is written by Aftab Alam.