Real estate is simply a piece of land plus any natural or artificial (man-made) improvements that are attached or have been added. Examples of natural attachments to the land include trees, valuable mineral deposits and oil – anything that would normally be considered part of the land. Artificial improvements include buildings, sidewalks and fences.
Real property is a less commonly used term and less commonly understood concept. Real property includes real estate, and it adds a bundle of rights. This bundle of rights a broad term used to organize property rights (as they relate to real estate); in a nutshell, it grants property owners the ability to use their property as they see fit.
A bundle of rights is comprised of five different rights of the property owner:
- The right to possess is the right to occupy the property.
- The right to control is the right to determine interests and uses for others.
- The right to enjoy is the right to use the property without outside interference.
- The right to exclude is the right to refuse others' interests or uses for the property.
- The right to dispose is the right to determine how and if the property is sold or given to another party.
There are some other complex exceptions and restrictions to these rights and legal treatments. In general, the difference between real estate and real property boils down to the inclusion of the bundle of rights. Basically, real property consists of both physical objects and common law rights; real estate only consists of physical objects.