What is Real Estate?

Real estate, or real property, is the term that is used to describe a sum of land and any natural resources such as water, timber and agricultural crops as well as any immovable fixtures such as landscaping vegetation and buildings attached to that sum of land. Although real estate and real property are often used interchangeably, real property is more often used in the case of legal matters referring to ownership of the land and/or any buildings on that land. Although, in some cases, the term “real estate” includes the land and any buildings as one entire piece of property while “real property” considers legal ownership of the land and any structures on it separately.

The term real estate was widely believed to come from medieval times when all land belonged to the Royal Family. Hundreds of years ago, the peasants paid taxes or rent to be living on the King’s land, similar to the rent or property taxes we pay today. The word “royal” comes from the Latin word for “king”, rex-regis and the Spanish word real. However, real estate is actually derived from the Latin word for “thing” which is res/rei. This distinguishes real property as a sum of land and all that is attached to it from personal property such as clothes, furniture, and other possessions.


Owning real estate is an effective way to accumulate wealth in the United States. Since each piece of property has different characteristics — trees on the land, rivers or streams running through it, the structures that are erected and the acreage of the land — the value of each plot of land needs to be determined by an appraisal. A professional appraiser can help determine what specific real estate may be worth and how good of an investment it will be. There are several tax-related advantages to owning real estate, and the estimated value of all the land owned by private owners in the US is in the trillions of dollars.

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