How Real Estate Works


You’ve probably heard of the term “fix and flip” and wondered how it all works. Real estate is land, buildings, and properties, such as a house, office building, apartment complex, strip mall, warehouse, or underground parking lot. A real estate transaction involves two parties, one of which is the landlord and the other is the tenant. In either case, the landlord and tenant must cover all outgoings, including taxes and insurance.

Rental property is a key component of the housing market

The US rental property market is worth $36 trillion, but that figure is much smaller. The primary reason is that rents are increasing due to immigration. Many immigrant workers will soon be returning to the country and will find it difficult to find affordable housing. The shortage of rental properties is likely to lead to a higher demand for rental housing, which will put stress on landlords. While wages will be rising over the next few years, they will not keep up with the rise in rent prices. As a result, landlords will need to screen their tenants more carefully. Read more


A recent Harvard study showed that one in four renters spent more than half of their income on housing, despite the fact that the number had dropped since 2014. Furthermore, the number of severely burdened households rose by fifteen percent, or from 20.8 million to 20.9 million. Renter households also tend to be more diverse racially, with nearly half of renters under 30 years old. In addition to being more diverse, renters are also younger and less affluent, with many working class households struggling to make ends meet after paying the rent.

Industrial real estate lease agreements require the tenant to cater for all outgoings

Commercial real estate lease agreements can take on different forms, such as triple Net, FIFO, and Class A. FIFO leases require the tenant to pay basic rent, while the landlord charges for the other portion of the property’s operating expenses. Other types of lease agreements require the tenant to pay for property taxes and maintain common areas. A Net lease can also cover the costs for fire sprinklers, common area utilities, janitorial services, and property management fees. There are four types of NNN lease agreements, but each has its own unique characteristics.

An industrial space is usually made up of timber and brick and used for manufacturing, distribution, and research. These buildings may include some office space as well. There are three primary classifications of industrial property: speculative, mixed-use, and infill. The former industrial space is often used by TAME (Technology, Media, and Energy) companies. They have strong financial statements and a strong market presence, which indicates that they are less risky as renters.

Fix-and-flipping is the best-known idea of investing in real estate

While fix-and-flip investors can do most of the work themselves, many prefer to hire professionals to take care of the details and focus on day-to-day activities. As with any investment, however, success depends on many factors out of your control. These can include unexpected defects and the real estate market, which can impact resale time and profits.  


The most important thing for any investor to remember when investing in fix-and-flip deals is that location is everything. Location is an incredibly important aspect of real estate and can make or break your investment. The best homes to fix-and-flip are located in prime neighborhoods where property values are high. Investing in prime properties is more likely to yield a higher profit margin than in a resale market, where prices may decline.


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