What Is Real Property?

7 Min Read
Updated Dec. 19, 2023
Written By
Patrick Russo
grey and white suburban brick house

Anyone considering property ownership will come across the term “real property” in the legalese. But what is real property? It defines which rights you possess in relation to your property, and which ones you don’t.

What Is The Real Property Definition In Real Estate?

The Cornell Legal Information Institute defines real property as “land that includes not only the face of the earth, but everything of a permanent nature over or under it. This includes structures and minerals.” Real property signifies a legal possession, right and use of an object, whether it be tangible or intangible.

Conceptually, it’s easy to think of it as everything you would inherit rights to at the transfer of ownership of a property. For example, house hunters ought to know that the playground set, if freestanding, likely isn’t explicitly bundled with the real property you’re seeking to purchase.

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What Are Some Examples Of Real Property?

Real property is anything affixed to the land in question. Examples of real property include, but are not limited to, the following:

  • Pond
  • Dam
  • Shed
  • House
  • Private road
  • Machinery
  • Crops
  • Basketball court
  • Well
  • Sewage system
  • Dock
  • Canals
  • Fences
  • Landscaping
  • Minerals
  • Buildings

Each of the real property examples above highlights the fact that real property must be affixed to the land. For example, the fence in your front yard would be considered real property because you can’t pack it up to take with you when you go.

Keep in mind that real property laws vary from state to state. If you plan to make significant changes to the land on a prospective home, it’s wise to consult with a local contractor who is familiar with local laws.

What Are The Types Of Real Property?

Once you understand what encompasses your real property, it’s important to understand how that property is owned. There are two different major classifications of estates, separated by the duration of ownership: freehold and nonfreehold ownership.


Freehold Estates

Freehold estates allow ownership for an indefinite period and include, but are not limited to, the following:

  • Fee simple absolute: Owners of fee simple absolute properties have the highest level of ownership of a property with the right to make any legal changes to the property, to sell the property or transfer ownership to beneficiaries. The only things that can affect what a fee simple absolute owner can do with their property are encumbrances like liens or legal guidelines like zoning.
  • Fee simple defeasible: Owners of fee simple defeasible properties must meet specific conditions stated in the contract in order to retain ownership of the property. For example, you could buy land with the condition that it can’t be used for commercial purposes. If you break that condition, ownership of the property could revert back to the original owner.
  • Life estate: Life estate is a special ownership type that’s tied to the life expectancy of the grantee, called a “life tenant.” When the life tenant passes away, the ownership will be transferred to the person of their choosing. Life estates are valuable options for families seeking to simplify the estate planning process.

When you own a freehold estate, you and your beneficiaries can benefit from the bundles of rights associated with a real property.

Nonfreehold Estates

Nonfreehold estates are property types limited by duration. The most common type is the leasehold, which grants lessees the right to occupy land owned by the lessor but gives no ownership interest of the property to the lessee. The most common types of nonfreehold estates are:

  • Tenancy for years: Tenancy created by a lease with a definite beginning date and end date of the lease. The time frame does not necessarily have to be 1 year. As long as the lease has a beginning and end date, it is considered a tenancy for years.
  • Tenancy at will: Tenancy that exists at the will of the lessor and the lessee. Either party can terminate the lease at any time, but there may be specific conditions for how much notice either party must give each other.
  • Tenancy at sufferance: A tenant that was once living on the property lawfully but has stayed on the property past their legal rights. For example, if a tenant refuses to leave an apartment after their 1 year lease expires, they have tenancy at sufferance.

Concurrent Estates

Concurrent estates are properties owned by two or more people. Different types of concurrent estates include: 

  • Joint tenancy: Each owner has undivided ownership of the entire property. It creates a right of survivorship which allows one owner to absorb the other’s ownership interest if they die.
  • Tenancy by the entirety: Tenancy available only to married couples. Spouses have undivided ownership of the property, the right of survivorship, and cannot transfer the property without the consent of their spouse.
  • Tenancy in common: Tenancy that typically does not include the right of survivorship. Co-owners have undivided ownership, but if one dies, their ownership is transferred to a party specified in their will.

Real Property Vs. Real Estate

Real estate describes the plot of land and the man-made and natural resources attached to it, whereas real property describes an individual’s legal limits and liberties on how to use said real estate.

Think of it this way: real estate is tangible land, buildings and garden beds. But real property is a legal concept that attaches a “bundle of rights” to the property. The bundle of property rights is nearly universally recognized as:

  • The right of possession: The title holder owns dominion over the property.
  • The right of control: The title holder can make any legal changes to the property. There are exceptions for local zoning laws or any covenant rules with a homeowner’s association.
  • The right of exclusion: The title holder holds sole permission of entry to the property. Exceptions include warrants from law enforcement to search the property.
  • The right of enjoyment: The titleholder is allowed to enjoy their property in any (legal) manner they desire.
  • The right of disposition: Once the titleholder maintains full equity in the property (no longer mortgaged), they may transfer ownership however they legally choose.

Real Property Vs. Personal Property

If you’re not sure if something is real or personal property, ask yourself this: Is it moveable? If not, it’s likely real property.

Let’s say you purchased a lakefront property and decided to build a dock. You bought power tools, some nails, the wood to construct the dock. As individual pieces, these supplies are your personal property. Once you’ve built the dock and affixed it to the land, it’s no longer moveable and has become real property. Although the dock is real property, any power tools or items not affixed to the land will remain your personal property.

How Do You Manage The Transfer Of Real Property? 

There are several ways to transfer real property.

Real Property Transfer By Selling

Selling real property involves transferring the property in exchange for something of value.

Real Property Transfer Through Gift

Gifting real property involves transferring the property without getting anything of value in return.

Real Property Transfer In A Will

You can transfer your property after your death in a will, a legal document with instructions for how to handle your property after death.

Real Property FAQs

Where does the name real property come from?

The “real” in real property derives from the Latin word realis, which means actual or actually existing. Starting in the 1660s, “real” was used in the English language to refer to immovable property. So real property essentially means property that can’t be moved.  

What is the most common form of real property?

Fee simple property, in which the owner has full and indefinite control of the property, is the most common form of real property.

Is a car considered real property?

A car is not considered real property. Since it can be moved, it’s considered personal property.

The Bottom Line: What Does Real Property Mean To You?

Real property is a bundle of rights that you have to the immoveable objects within a defined perimeter, whether they are tangible or intangible. Knowing the details of this bundle of rights is critical for the home buying process. If you’ve done your research and are ready to start the home buying process, with Rocket Mortgage today!

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