Small Real Estate Business

Small Real Estate Business can be defined as real estate business on a small scale, i.e. real estate business dealing with projects on a small scale. A real estate can be defined as real properties such as land, land improvements and buildings held for purposes of business use for the production of income. As opposed to personal property (also called chattels) where the ownership title cannot be transferred, real estate consists of immovable properties where the ownership title to the property can be transferred. For purposes of jurisdiction, real estate can be defined as land and anything that is permanently attached to it. These fixtures do not only include buildings but items such as fencing for the buildings, but also plumbing, heating and light fixtures. Real estate business can thus said to be business dealing with the ownership and use transfers or real or physical property or realty. In this context, small real estate business implies real estate business that is concerned with ownership and transfers of real properties which are relatively small in stature, such as shops, hotels, restaurants or people’s dwellings or condominiums with no large financial valuation attached to it.

Small real estate businesses can also be a profitable source of investment as a result of capital gains accrued on the property. Capital gains are realized from the rise in the value of the property after every few years. The important feature with regard to real estate properties is that the value of the property is heavily dependent on its location and the condition of the area surrounding the property. Also, leverage exists within the real estate business as high percentage of the investments is made with debt funds. With comparatively lower down payments, real estate investment entails large sums of capital investments. Small real estate business can generate an annual income if investments are made on small commercial or residential properties.
Small real estate business has experienced rapid growth in countries such as India and China which have recorded a spurt in the incomes of its middle-class coupled with rapid growth in its Gross Domestic Product (GDP). Apart from that, fast urbanization in the two countries has brought about a boom in the housing sector in these countries. the small real estate business sectors that have thrown up new business opportunities is the rise in shopping malls, multiplexes and various hotels, coffee shops and restaurants and bars to cater to the upwardly mobile young generation of people in the developing countries of South –East Asia. The spread of globalization across the world and the rise in consumerism has led to the choice from a large basket of consumer goods in many newly emerging countries. With the growth in employment opportunities in these economies, new businesses have emerged and chances to invest in the real estate sector.

Real estate investment is one of the key areas of investment opportunities concomitant with the growth of the economy. Based on several macro-economic factors, the growth of the economy is also based on the socio-economic situation of the country with a corresponding degree of political stability as well. Countries such as India, China, Brazil and Vietnam after opening up their economy have experienced real estate booms which have translated into mega projects such as complete transformation of its decaying infrastructural facilities and construction of dams and power projects to meet the rising demands of its people. But not all real estate investment has been in these sectors: rise in the number of offices, shops, public projects such as parks and gardens constitute small real estate business. With the rising social responsibility of these governments to ensure healthy living for all its citizens in the wake of an all-inclusive growth strategy adopted by these countries, construction of small dwellings for the poor and impoverished also comes under the ambit small real estate business.