Real property is land and anything else permanently affixed to it, including structures, minerals and machinery. This is contrasted with personal property, which consists of movable assets like furniture and appliances.
Local laws dictate the definition of what constitutes real property, but generally speaking it includes land and improvements to the land. Storage of severed or extracted natural products and deposits doesn’t cause them to become recharacterized as real property.
Land
Land, also known as real estate, includes everything that is on, below or above the earth’s surface. It also encompasses things that are permanently attached to the land, such as buildings, crops, fences and ponds.
Real property can be residential or commercial in nature. It is usually taxed and has many legal considerations. Among these are zoning laws, building maintenance and property development rules.
Land is a key element in the business of real estate, as it often contains valuable natural resources. It also offers the flexibility of a hands-off investment and may appreciate in value over time.
Buildings
Buildings are an important part of real property. They are considered to be either natural or artificial attachments to the land, with the former being things that grow on the land or are produced by nature, such as trees and crops, while the latter includes structures like buildings and fences. If a man builds a wooden bench on his back deck, it becomes an artificial attachment to his home and therefore part of his real estate.
Residential real property is primarily used for habitation by a single family or multiple families. This type of real property often requires extensive legal considerations, including zoning regulations and rental agreements. Commercial real property is a separate category that includes offices, malls and other business facilities.
Structures
A structure is any permanent fabrication or construction that is attached or affixed to land and increases utilization or enjoyment of it. Examples of structures are dams, bridges, storage silos for agricultural products and fences.
Residential real property includes single-family homes, apartment buildings and condominiums. Owners of residential real estate must deal with a variety of legal considerations, including property taxes, zoning laws and property maintenance.
The Delaware Statutory Trust is a superior investment structure for clients seeking passive ownership of income-producing real estate. This structure is ideal for clients with a net worth of $1 million or more and who require 1031-compatible replacement property managed by professionals.
Machinery
Machines are physical systems that apply forces and control movement to perform an action. They can be artificial, such as those powered by engines, or natural, such as molecular machines.
The value of machinery can be determined by analyzing its current condition and considering factors such as age, maintenance history, technology advancements and market demand for specific types of machinery. For example, a piece of equipment that is state-of-the-art may be valued higher than an older version because it allows for increased production efficiency and cost savings.
Machinery that is affixed to land or a building becomes real property, while machinery that is portable and not connected to permanent structures are personal property. This includes items such as catwalks adjacent to production equipment, scaffolding around tanks and braces under vats.
Minerals
Mineral rights include ownership of the natural resources in the ground beneath a property, such as coal, oil and natural gas. They also include the right to extract and sell them.
The presence of minerals on a property can dramatically affect its marketability and liquidity. For example, regulations governing mineral extraction can dictate who can benefit from the resource and how much it can be sold for. Learn more about this at sellmyhousefastmiamifl.com.
Minerals are defined as natural solid substances with a distinct crystalline structure. Some minerals show specific physical properties, such as cleavage and symmetry. For instance, plagioclase feldspar displays striations on its cleavage surfaces that can be easily identified with the help of a magnifying glass.
Mineral Leases
Mineral rights allow a property owner to explore and extract the minerals under the surface of a tract of land. Property owners can sell, lease or bequeath these rights individually. Since mining and drilling are expensive and time consuming, many owners opt to sell the mineral rights only and keep the surface property for living on or developing. These separate ownership arrangements are known as a severed estate or fractional estate.
When mineral rights are leased, the property owner may be paid a royalty payment. This payment is usually a percentage of the total value of the minerals extracted.
Personal Property
Personal property includes all possessions that are not considered real property. Bob’s blue pick-up truck falls under this category because it is movable and not attached to his land. Personal property is also referred to as chattels and personalty.
Tangible personal property is movable and can be touched, such as furniture or cars. This type of personal property is taxed separately from real property by many states.
Intangible personal property cannot be physically handled, such as stocks and trust fund accounts. These are categorized as assets and may be used to determine a potential borrower’s creditworthiness. Some types of personal property depreciate while others, like artworks and antiques, appreciate in value.