What Is Real Estate?

Jan 24, 2025

Real estate generally refers to land and the structures on — or sometimes beneath — it.

Written by Clay Jarvis

Lead Writer

Edited by Beth Buczynski

Lead Assigning Editor

Written by Clay Jarvis

Lead Writer

+ 1 more

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The term ‘real estate’ gets used when we talk about homes, land, investments and even jobs. But what exactly is real estate?

Most Canadians use ‘real estate’ to refer to land and buildings, but there’s a little more to it.

How is real estate defined in Canada?

Real estate is a term that is used to refer to real property. According to the Government of Canada, real property is “land, mines, minerals, buildings, and fixtures on, above or below the surface, and any interest therein, both in Canada and abroad.”

We can define real estate as land and anything that grows or is built on it, as well as the real estate industry and those who work in it — real estate agents, brokers, investors, mortgage lenders, developers and more.

Real estate as property can be further broken down into subcategories, depending on the type of real estate it is or, in cases where the land hasn’t been developed yet, its intended use. These categories are:

Residential real estate: Houses, condos, townhouses,duplexes and mobile homes.
Recreational real estate: Second homes, cabins and cottages.
Rural real estate: Farms, ranches and land. .
Commercial real estate: Shopping malls, office buildings, apartments and industrial spaces.
Institutional real estate: Hospitals, schools, airports and churches.

Ways to own real estate

Owner-occupied real estate

Many individuals get involved with real estate by looking for a home to live in. These owner-occupiers typically opt for residential, recreational or rural real estate.

Investment real estate

You can also get into real estate by buying property as an investment, typically with the intent of renting it out. Investment properties are popular among Canadians and can be a reliable source of passive income.

When it comes to investment properties, there are plenty of options. Residential investment properties include homes, apartments or condos, which you can rent to an individual or family.You can also purchase and lease out a commercial property to a business. Common commercial properties include retail, restaurant and industrial spaces.Some investors opt for mixed-use real estate that combines space for businesses on certain floors and residential units on others.

🤓Nerdy Tip

Buying and owning a rental property comes with different rules than owning a property you’ll occupy. You’ll want to familiarize yourself with any applicable municipal and provincial regulations, as well as qualification requirements for financing.

Financing a real estate purchase

Most real estate in Canada is fairly expensive, so unless you’re paying with cash, you’ll have to get a mortgage to complete your purchase.

Where you get your mortgage might depend on what kind of real estate you’re buying. Most banks offer funding for residential and commercial real estate purchases, but smaller lenders might only deal with residential buyers.

If you’re buying commercial real estate, you’ll want to work with a mortgage broker who has specific commercial lending experience.

Real estate agent: A licensed professional that helps individuals buy or sell a home.
Real estate broker: A real estate agent with additional accreditation that allows them to run a real estate brokerage.
Real estate investment trust: An company that pools its commercial real estate holdings into a fund investors can buy shares in.
Real estate bubble: A real estate bubble occurs when home prices become rapidly inflated and are at risk of an equally sudden reversal — the bursting of the bubble.
MLS: A multiple listing service is where real estate associations, like the Canadian Real Estate Association, allow their member agents to post detailed listings of homes for sale. Realtor.ca is Canada’s primary MLS.
Cap rate: Short for “capitalization rate”, cap rate is a formula that helps investors estimate the profitability of a piece of real estate by comparing rental income and a property’s current market value.

Frequently asked questions