A guide to real estate asset classes, property types, and property classes
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Loading... - Roseline Ampofo
- 11 Aug 2022
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An asset class is a collection of investment types with similar characteristics that behave similarly in the marketplace. They are broken down into traditional and alternative investment types.
Equities (stock market and bonds), fixed-income investments, and cash and cash equivalents are all traditional asset classes. Alternative investments include real estate, private equity or venture capital, start-up companies, art and antiques, films, and commodities, to name a few.
Real estate is the most common alt investment, especially for those new to investing. The real estate industry breaks down the asset class into property types and property classes so that investors can compare different potential investment properties more efficiently.
The real estate asset class
The real estate asset class is defined by “real property,” a term that means land and any improvements made upon it that are permanent. These improvements can be natural (water and trees) or man-made (buildings, homes, and fences).
Although you might hear the term “real estate asset classes,” it’s not an accurate description of real estate types. Real estate is an asset class, but it is not broken down further into asset classes. Instead, different types of real estate are categorized by property type and property class—not to be confused with asset classes. Read More...
