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Human Rights  » Real Estate You Need to Know: Bundle of Rights

Real Estate You Need to Know: Bundle of Rights

Big Yawn

When you first read basic material about real estate, you might

ask yourself, "great, but how is all this going to help make me

rich?" The answer is: if you want to get rich in real estate,

you have to understand what you are buying; if you know more

than the other guy, you can find properties that he can not, and

you can take command at the negotiating table. This is not a

bunch of academic theory - you need to know this stuff if you

really want to become a successful real estate investor.

I do not intend to give away my secrets in free tutorials. What

I hope to accomplish here is to prove to you that there is a

whole world of information that you need to learn to be

successful, and that I can teach you in a way that makes sense

and that is easy to understand. If these tutorials are

successful, you will buy my book; and then I will reveal my

methods to you. Shameless advertising? Probably, but this is one

way that I can cut through the gaggle of real estate books that

promise much but deliver little. I hope in the end you will

agree that I promise much and deliver more.

Owning Real Estate

An odd fact about real estate is that the most fundamental

aspect of owning land and property is grossly misunderstood by

the general public. Sadly, even many real estate professionals

do not fully understand the concept of property ownership.

You are about to embark on a career of buying and selling real

estate. That is your new path to great wealth. You might want to

know what the idea of owning real estate actually means!

Ownership is nothing more than society granting to you the right

to use land to the exclusion of others. Through the rule of law,

society identifies what aspects of ownership are to be defended

and enforced. Property rights are a consequence of community,

because a person stranded on a previously uninhabited island

clearly has no need to worry about property rights. But as soon

as a second shipwreck survivor washes up on shore, the two must

start to divide the resources, hopefully in an equitable way. As

the island becomes more and more crowded (ships can not seem to

avoid that reef offshore!), the definition of rights becomes

ever more critical to avoiding conflict. By defining these

rights clearly, the growing island society avoids wasting

resources fighting over rights, and instead can use those human

resources for more productive pursuits and economic gain.

Individuals and Communities

Over time, conventions and laws have evolved in modern societies

to balance the needs of an individual against those of the

larger community. This means that the rights of ownership come

with some constraints so that the actions of individuals on

their own land do not adversely impact society at large. The

rights associated with ownership are therefore not unfettered,

but are tempered by the desire to balance competing needs. You

may want to put a grocery store on your property, but are

prohibited from doing so because the land is zoned by society

for residential use only. "It is my land and I can do what I

want with it" is true, but only to the extent that your desired

actions are sanctioned by law.

When you buy real estate, what you are really purchasing are the

rights to possess and control use of the land, rather than the

land itself. At first this seems like a subtle point, and that I

am splitting hairs. But this point is critical to understanding

real estate. When you buy a car with cash, you own that car

absolutely. You own the car itself, not just rights to use and

possess the car. Buying the car is no different than going out

and buying a T-shirt, except one takes less money than the

other. Hopefully it is the T-shirt that costs less. But buying

land or real estate is different. You can not grab your acre,

put it in your pocket and take it to another state. Land is

permanent and immobile, and owning something that is forever and

can not be moved is just different than owning something that

you can take with you or throw away. The laws recognize this

difference. That is why you do not own land like you do a car or

your clothes. With land, you own rights. From a practical point

of view, you are able to almost do all the things you are used

to with ownership. But not everything. Nobody will ever tell you

what to do with your T-shirt (except maybe your spouse begging

you to wash it). Society has no interest in your shirt. But land

is different. The country itself is defined by land. Society has

a long-term interest in what you do with your land, and what

will happen to the land when you are gone.

Bundle of Rights

Since land ownership is in reality defined as a set of rights,

the fundamental basis of ownership can only be understood by

examining those rights. The classic analogy used in real estate

to describe the rights of ownership is a handful of sticks,

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where each stick represents a right or stream of benefits. As

more are added, the bundle gets larger. But while commonly used,

and found in virtually every book about real estate ever

written, I find that the analogy is really not terribly helpful,

nor particularly imaginative. The more important point is to

discover what is included, typically, among the rights of

ownership in modern societies.

These rights, summarized below, are explained in detail in my

book.

* Right of Possession * Right of Exclusion * Right to Transfer

Rights * Mineral and Subsurface Rights * Water Rights

Before buying any property, before making any real estate

investment, before embarking on your new career as a real estate

mogul, you should fully understand all of these rights of

ownership. I walk you through each of these in detail in my

book, Beyond No Money Down.

Big Advantage

With a full and deep understanding of what owning real estate

really means, you have an advantage over others when looking for

property and negotiating a price. You know exactly what you are

getting, and therefore, are in a superior position to know what

price the property in question is really worth. These concepts

are not just some airy academic theory, but truly important to

your career in real estate investing. At the same time, they are

easy to understand when clearly explained. Understanding the

fundamentals is essential to learning the nuances of real estate

that will help make you rich. Understand these, and you can rule

the roost in any real estate transaction. Knowledge is power,

and I give you that knowledge in my book in an easy-to-read and

easy-to-understand format.

If you want to learn more about Beyond No Money Down, go to:

www.realpropertymillionaire.com

About the author:

Dr. Schneider is a recognized expert in building personal

wealth, with his best selling books "Beyond No Money Down" and

"Trading Futures: Only One Way to Win". Practicing what he

preaches, he now lives in a beautiful waterfront home in central

Texas, owns and operates his own jet, and travels the world

first class giving lectures across the country and across the

globe.