Definition of "Real estate investor"
A real estate investor also known as a real estate entrepreneur is someone who allocates money in order to purchase property, land or rights above and below land. In the term real estate, real comes from the latin root “res” or things which refers to anything that has a physical form, is palpable and tangible and estate means property. An investor is a person or organization that puts money into a financial scheme and expects to get future profit.
A real estate investor could also be defined as a person that evaluates the real estate market and purchases property in order to build wealth.
Passive or active investors
Real estate investors could be passive or active investors. An active investor purchases property, then makes improvements or repairs in order to increase the value of it and sell it later for a profit and an appreciation or depreciation in value could occur over time without a conscious implication of the investor. A passive investor hires a real estate company that finds the proper investment opportunities for the real estate investor.
There are four types of real estate: commercial, residential, industrial and land.
Commercial real estate - In this category we have strip malls and shopping centers, educational and medical buildings,offices and hotels.
Residential real estate - Here we include new construction and resale homes. The most common in this category are single-family homes and we could also mention condominiums, duplexes, townhouses, co-ops, quadplexes, high-value homes and vacation homes.
Industrial real estate - This category includes manufacturing property and warehouses, basically any building that can be used for research, production,storage and distribution of goods.
Land - Here we can include any vacant land, farms or ranches. Also vacant land holds a subcategory of lands that are underdeveloped, reuse, side assembly or subdivision.
Real estate investors put money in any of the four categories mentioned for a long-term gain and expects a financial return from their investments. Investing in real estate property that is at a all-time low price and expecting an appreciation in value in the future is usually the ideal scenario for any real estate investor but that involves speculating that in the long term, the price is going up.
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