Although the terms real estate and real property sound quite similar, they, in fact, are not. The purpose of this article is to help you differentiate between the two and understand the term you’re specifically looking for. Let’s get to it.
Real Estate specifically refers to a piece of owned land, the natural resources which it contains, and the improvements which have been developed or attached to it.
Natural improvements normally refer to the oil, water, gas, coal, or other resources which are naturally found under a land. Artificial or human-made improvements include buildings, barns, sheds, sidewalks, or fences. As a general rule, all improvements made to a land cause a significant increase in its economic value.
Real estate is also divided into two categories:
- Residential real estate
- Commercial real estate
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Now, let’s move on to discussing the real property, and then, a brief discussion on their difference.
Real property, on the other hand, is a broader concept which includes real estate. It includes all land, buildings, improvements just like real estate, but also caters the individual rights which are associated with those estates.
Simply put, real estate deals with the physical aspects of all buildings. Real property deals with both the physical as well as the legal aspect of things. It allows the owner of the land to make use of it as he or she sees fit, with all privileges granted by law.
Here’s a list of some of the most common rights granted to an owner:
- Right to own
- Right to possess
- Right to use
- Right to enjoyment
- Right to sell
The distinction between the two is fairly simple and doesn’t concern commoners. However, from a legal viewpoint, it is important.