What is real estate, how many types are there, and how does it differ from personal property?
"Personal property" (movable property) and "real estate" (immovable property) are terms most people have heard, but few know what they truly mean. This matters, because it affects the laws that apply to property and the property rights we rely on in everyday life. In this article, CP LAND will help you understand what personal property and real estate are, how they differ, and how many types of real estate there are, so you can better understand both.
What is real estate?
"Real estate" (in Thai, the colloquial short form of "immovable property") refers to land and anything permanently attached to or forming a single unit with that land — for example buildings, houses, offices and factories — as well as natural things that form one unit with the land, such as rivers, ponds, minerals, gravel and sand. It also includes rights in land, such as the right of possession and the right of habitation.
What are the key characteristics of real estate?
Real estate has distinctive characteristics that help determine its value — the key factors real estate investors use to assess and price a property. These can be divided into four characteristics, as follows:
1. The value of real estate depends on external factors
The value of real estate does not depend on the property itself, but on its location and the economic conditions at the time. In an economic downturn, real estate prices fall too — and this is when investors often buy in cheaply to resell later once prices rise again.
2. Real estate is relatively slow to convert into cash
Because most real estate carries a high price, buyers need a large sum of money or must obtain a bank loan to fund the purchase. As a result, it takes a fairly long time for a buyer to make a decision before the seller can complete the sale and receive the lump sum.
3. Real estate prices tend to keep rising
The value of a property for sale or lease rises continually over time, which is why owners list their sale, rental and consignment prices with a long-term view, waiting for the property to appreciate further.
4. It has a long lifespan
Most real estate has a useful life of as long as 50–100 years, allowing owners to benefit from sale-with-right-of-redemption or leasing to generate steady long-term income.