Real Estate: Definition, Types and Tips Investment for Beginners estate is a term which, when translated into Indonesian, means real estate. The general public knows real estate as a business of buildings, housing and other structures.

What we all need to know, basically RE has the meaning of land along with objects in the form of buildings or other things that stand permanently on the land. This real estate also includes large plots of land that are still in the program to be used as residential buildings, schools, buildings, and so on.

In 1974, the first time the government officially regulated RE  as an industry. The real estate industry is the entire process of procuring, supplying, managing and constructing buildings on real estate land. Based on the increasingly intense development of the country, the RE industry has become a very influential driver for the country.

This type of real estate business activity is very potential for a long period of time. Various regions and cities in Indonesia are developing land that has not been used optimally so that it can be better managed as a real estate, property, and other needs fulfillment business.

In the future, real estate is expected to continue to gain a prime position in efforts to improve the economy. This is because RE can adjust to the demands of the global community and adjust to the times.

This article reviews in more detail what real estate is, types of real estate, the difference between real estate and property, examples of differences between real estate and property, various real estate industries, real estate examples, and recommended reading about real estate. 

What Is Real Estate?

Real Estate

We can know the meaning of real estate that can be seen from the use of these two words. ” Real ” has the meaning of the word royal or kingdom while estate means land. In Indonesian, real estate is also often referred to as a term “real estate”. Well, real estate is actually the meaning of the word real estate which in English means immovable property in the form of land, natural resources and buildings.

The mention and writing of the legal term real estate includes property, buildings, houses or projects, we often use the word real estate or it is standardized in Indonesian writing as real estate. In fact, property development company organizations in Indonesia use the word real estate ; Association of Indonesian Real Estate Companies (REI).

Another opinion came from expert Ivan Lanin, an Indonesian language expert. Menyatir from Ivan Lanin wrote that the first use of real estate in English was recorded in the 1660s. For those who don’t know, real estate has been proposed as a real estate equivalent. Tanah means arable land, while yasan is taken from the Javanese language, which means something that is made or to be built.

Ivan Lanin also noted that the translation was carried out based on the concept of the meaning of the terms it contains, not based on the meaning word for word. But unfortunately, it seems that the term creation which is quite beautiful will suffer the same fate as mangkus and sangkil: losing popularity compared to its uptake because it is more effective and efficient.

Meanwhile, the Financial Services Authority (OJK) has its own definition of real estateReal estate in the OJK definition is land and all physical buildings, including all objects attached to the land, such as buildings, fences and other structures that are physically on the ground.

The term real estate also refers to legal terms relating to a piece of land and its environment, along with the buildings and projects that are on the land. However, in this modern era, the meaning understood by society can consist of three categories. The three categories are residential, commercial and industrial.

With the above meaning regarding RE, which is classified as real estate also includes all the resources that are above it, such as: plants, minerals, water, and other immovable objects that are in the land area.

Panangian Simanungkalit, a prominent property expert whose name is well known among business people, writes in his book entitled ” How to Get Rich Through Property “, that real estate is ” land and all improvements made both on and to land “. That is, real estate is a term commonly used for land with all its improvements and developments.

Everything that is attached to land or land, is part of real estate. This includes buildings that blend on top of it, to house elements that blend together, such as yards, fences, roads, and so on.

We need to remember again, this term is not limited to housing only. However, it can be divided into the following three categories, residential, commercial areas, industrial. This means that undeveloped land, office buildings, shop houses, factories, and others, are included as part of RE.

What Are the Types of Real Estate?

Real estate has several types that can be categorized into three broad categories based on their use, namely:

1. Residential

Residential is a building that is used as a place to live. For example, for housing, flats, and condominiums (large, luxurious, high-rise buildings for rent, or apartments). In this residential area, there are usually places for small businesses such as minimarkets and home industries.

2. Commercial

Commercial is real estate that is commonly used for commercial purposes and for profit. Some examples of commercial real estate are office buildings, warehouses, hotels, and anything that can generate profits.

3. Industrial

Industrial is a field of businesses attached to real estate land.

Difference between Real Estate and Property

Perhaps some of us think that real estate and property are two of the same thing. In fact, if we look at them together, they are two different terms. If property can be interpreted as ownership of land or buildings attached to it. Property can be said to not only look at the structure of the building attached to it, but also ownership rights and interests in the land and building.

While RE refers more to the physical (land and buildings) while property does not only refer to the physical but also physical ownership rights (land and buildings). So, we can conclude, if this type of housing can be called a property, but cannot see property as real estate.

It should be remembered again, real estate and property are two different things. In our homeland, there has indeed been a slight shift in meaning in a society. So, when you hear the word real estate, what people have in mind is a complex in elite housing, as well as a neat and clean environment in a large and beautiful area.

Then, if the two are different things, the question arises, “What is the difference between RE and property?” At first glance this might be easy to answer, but it turns out to be a confusing question for some people. The media frequently refer to the RE market from a living in housing perspective. Meanwhile, according to its use, real estate can be grouped into three broad categories, namely: residential, commercial and industrial.

In simple terms, what distinguishes real estate and property lies in its physicality and ownership. If real estate refers more to the physical such as land and buildings, while property refers more to physical ownership such as land and buildings. We can say that real estate is a subset or part of property.

The following are some examples of the differences between RE and property. If someone owns land without a building on it and someone who owns land with a building on it is called a person who owns property.

Meanwhile, a building owner who rents land and then builds on that land is called owning RE. Meanwhile, someone who owns an apartment is said to own real estate and not own property. This is because a real estate owner does not have ownership or rights to the land where the apartment is to be built.

If you look at it, a real estate and property company is a company that, apart from owning ownership, also carries out sales or marketing activities for its ownership. This marketing can include selling or renting.

Meanwhile, when we hear the term property, usually what we imagine in our minds is an individual building unit or a complex of buildings. For example, an expensive housing unit in a housing complex costs hundreds of millions, or a luxury home with a large yard costs tens of billions of rupiah.

Property is also often interpreted as a kiosk unit, a four-storey shop-house, an office building tens of floors high. Or a mall complex and apartment hotel resort complex and others. In this sense, property is more defined in a building itself than land.

Examples of the Difference between Real Estate and Property

Still confused about the difference between real estate and property? To make it easier for us to understand the difference between RE and property, here are some cases that we can use as a guide to distinguish between the two.

First, if someone owns land without any buildings on it, then he owns property. This is because he not only owns the object, but has legal rights over the object.

Second, someone who rents land and buildings, then he owns RE. This is because the person does not have property rights to the land where the building and land are located.

Third, someone owns an apartment unit, so he is classified as owning real estate and not property. This is because he does not have the right to the land where the apartment is located.

Kinds of Real Estate Industry

The RE industry is a business sector that can be divided into several groups based on the objects attached to the real estate land, namely:

  • The plantation sector, in this case also includes mining and forestry.
  • The housing sector, in this case relates to residential, multifunctional housing and residential RE.
  • The commercial sector, in this case, is a building used for business activities such as offices, shopping centers, apartments, hotels, and so on.
  • The industrial sector, in this case relates to light, medium and even heavy industry.

Based on the above groupings, this type of housing can be in the form of buildings or plantations that are tied to certain land and managed by the company for its clients.

Real Estate Example

Not only abroad, RE can now be said to have developed rapidly, giving rise to and attracting many investors. We will definitely find it very easy to find real estate agents who are spread across various regions in Indonesia.

If we think that RE is synonymous with housing, it is clear that this understanding is still not quite right because who would have thought that RE as a large enough scope. RE in this case is grouped into 3 big and different categories, namely residential, commercial, and finally industrial.

Based on the three categories mentioned above, we can see examples of RE to add to all of BankAgro insight. Some examples include townhomes, retail stores, factories, houses, condominiums, housing, office buildings, and so on.

After knowing the various examples RE above, you cannot clearly say that a building, factory, or even a condominium is RE, because you need to re-examine who owns the land and also the building. Is it important? Yes it is clear!, because it could be that the building is a property.

Tips for Real Estate Investment

For those of you who just want to start investing safely and reliably from property investment, you should follow these tips to avoid fraud!

1. Adapt to the budget

The first tip for beginners is to adjust what budget you have. Just like gold investment advice, to start any investment, you must adjust to the available budget. Don’t force yourself to try property investment if your budget is still minimal.

So, to start investing in RE, you must have the right calculations. Don’t forget to set your goals for starting a RE investment, whether it will be rented out, used as a place of business, for housing or for resale. Because property prices vary widely.

2. Do research and surveys

Do research and surveys. Unlike investing in stocks, where you just do research, but to start investing in RE, you also have to get right there.

Make sure when doing your research you choose a property that can provide other benefits or what is called a capital gain. Apart from that, you also need to determine the market if you want it to be rental, residential, commercial, etc.

Don’t forget to survey the place directly to see what facilities are available around the property. So that it can be a reference for raising prices and knowing whether the place is worth buying.

3. Choose a real estate investment

The next tip for beginners is to choose a real estate investment. This real estate is real estate. For example land, land, or land with buildings. This investment is perfect for those of you who want to invest for the long term.

As we know, from year to year, the price of land and buildings begins to increase rapidly. Therefore, this property investment is very promising and profitable.

Especially now that there are many online properties, where you can invest online using the crowdfunding system. Where this system is like a joint venture with other investors to own property. Of course, you have the right to invest in real estate online.

4. Talk to a professional real estate agent

Tips to Keep Newbies Safe Talk to a professional real estate agent. This point really helps you to start investing, because professional RE agents have of course been in the property world for a long time, they will understand better.

With this discussion, you will save more time and get complete information about the movement of property investment, starting from the target market, prices, etc. Especially now that there are lots of professional consulting services for agents.

5. Make sure all documents are legal and registered

Tips for beginners to be safe besides making sure all documents are legal and registered. If you have found a property that is suitable for you or to your liking. Don’t forget to check the completeness of the documents.

Is the property legal and registered or not? The goal is for you to get certainty and avoid bad parts such as investment application fraud or fraud. In addition, this legal document also complements the credibility of the property.

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