When investing in real estate or starting a real estate business, it is important to understand the industry classification codes that categorize the wide range of real estate activities. The Standard Industrial Classification (SIC) codes are four-digit numerical codes assigned by the US government to identify specific industries. For real estate businesses, SIC codes provide a systematic way to classify the main subsectors like residential buildings, nonresidential buildings, heavy construction, land subdivision, operators of nonresidential buildings, real estate agents and managers, and other real estate activities. Knowing the SIC code for your real estate venture can help with registering your business, filing taxes, obtaining licenses and permits, qualifying for government contracts, and researching industry trends and opportunities.
SIC 6500-6799 cover real estate related services
The section of SIC codes ranging from 6500 to 6799 encompasses establishments primarily engaged in providing real estate related services. This includes real estate agents and managers (SIC 6531), nonresidential property managers (SIC 6512), residential property managers (SIC 6513), appraisers (SIC 6541) and escrow agents (SIC 6552). Real estate services play a vital role in housing sales, rentals, management and valuation. As an investor or business owner, understanding the functions associated with each service subsector can help you utilize them strategically.
SIC 1521-1522 specify construction of residential and nonresidential buildings
New building construction is the focus of SIC codes 1521 (single-family housing construction) and 1522 (nonresidential building construction, like offices, hotels, hospitals, etc.). Construction companies classified under these codes are involved in activities like site preparation, plumbing, painting, electrical work, masonry work and carpentry for new residential and commercial building projects. Tracking construction trends using these SIC codes can provide insight into real estate supply dynamics.
SIC 6552 covers real estate investment trusts (REITs)
Real estate investment trusts or REITs are companies that own and manage income-generating real estate assets. They allow investors to gain exposure to real estate without directly buying property. SIC code 6552 specifically applies to REITs and tracking this sector can help analyze real estate investment flows. Factors like REIT valuations, dividends and regulation impact how attractive they are for real estate investment.
SIC 1531 specifies operative builders involved in land subdivision
Land developers who transform raw land into standardized lots for resale or development are classified under SIC code 1531. These operative builders are involved in activities like grading, excavating, road paving and utility installation to subdivide land into salable parcels. Monitoring this sector provides perspective on real estate supply and site preparation work essential for any construction project.
SIC 6700 incorporates real estate investment trusts (REITs)
Real estate investment trusts or REITs are companies that own and manage income-generating real estate assets. They allow investors to gain exposure to real estate without directly buying property. SIC code 6552 specifically applies to REITs and tracking this sector can help analyze real estate investment flows. Factors like REIT valuations, dividends and regulation impact how attractive they are for real estate investment.
SIC codes like 1521, 1522, 1531, 6531 and 6552 can provide valuable classification of real estate sectors like construction, land development, brokerages, management and REITs. Analyzing industry trends and performance using these codes can offer vital insights for real estate investing.