What Is A Property?
The concept of “property” seems simple at first glance. However, depending on the application or context, defining “property” can become surprisingly tricky. This article explores why the definition is often debated and how various industries view “property” differently.
What Is a Property? The Basic Definition
In the most straightforward sense, we might define property as:
“A property is a piece of land or building that is owned or possessed by someone or something.”
Seems like a solid definition, right?
But as we dive deeper, we start encountering exceptions.
For instance, does a leasehold count as property? What about a shared office space or a mobile home in a trailer park?
The more we think about it, the more complicated it gets.
Eventually the conversation changes to just simply define everything as a property. That is definitely an option, but it has its own drawbacks. We explain why.
Why Defining Property Is Complex
When everything is labeled as a “property,” things can get muddled.
The challenge with a broad definition is that it makes understanding specific attributes harder, which can cause issues when integrating property data across platforms or use cases.
Attempting to obtain a deep understanding of a property when everything is a property would be difficult.
Let’s break down a few of these challenges:
- Data Integration Issues
Integrations to other data sets is extremely difficult taking this approach, as the definition is quite fluid and can lead to inconsistent results.
For example, one data set may contain data on a granny flat and another on a main dwelling on the same parcel of land.
An address match used to link the two data sets will mean attributes from the granny flat will be added to the main dwelling, which isn’t correct. - Over-classification
Imagine you’re dealing with multiple addresses for the same building or property, such as an apartment building with different unit numbers—should each be considered a separate property, even if there’s only one main building? You could accidentally treat each address as a separate property, even though they all belong to the same main building.
A broad definition could lead to over-counting properties, skewing your data.
Context Matters: Defining Property Across Industries
The way we define property depends heavily on the context. Here are a few examples:
- In banking
In mortgage applications, “property” refers to the real estate that is used as security for the loan. Banks focus on its value, legal ownership, and physical condition because these factors determine how much they can lend. This contrasts with other banking activities, where property may be viewed more generally as an asset without the same level of detailed scrutiny or long-term interest in its specifics. - In the legal context
The definition of “property” often extends beyond just physical assets like land or buildings. According to the Australian Law Reform Commission (ALRC), property can be described as a bundle of rights—a legal construct that gives someone control over the use, enjoyment, and disposition of a certain asset. This means property doesn’t just refer to physical ownership but includes rights to lease, sell, or inherit that asset. - In vacation rentals
On a website like Airbnb, a property could be anything from a private room to an entire villa, or even a yurt! - In hotels
For accommodation platforms, each hotel itself may be considered one property, even if it contains multiple rooms for rent. - In government data
Government data systems define property in different ways through a combination of spatial, legal, economic, and usage-based attributes to support various administrative, planning, and statistical functions.
There’s no universal definition of property, but aligning the term to the needs of your business and customers is critical.
Tips for Defining Property in Your Data
When defining what constitutes a property in your business, here are a few key things to keep in mind:
- Avoid overly broad definitions
The wider your definition of property, the harder it will be to capture detailed information. Try to be specific. - Ensure integration flexibility
If you plan to use third-party property data, ensure your definition allows for easy data integration. - Align with common property concepts
Typically, property data revolves around parcels, titles, addresses, or buildings. Ensure your definition aligns with one or more of these. For more in-depth guidance on property data, read our post on the differences between parcels, titles, addresses and addresses. - Carefully handle third-party data
When integrating external property data, verify that the definitions are compatible or identify any differences early to avoid data issues. - Consistency is key
Ultimately, the definition of a property will vary depending on your industry, business needs, and customer expectations. What matters most is consistency—once you define what “property” means to you, apply it consistently across all of your data handling processes. Inconsistencies can lead to misinterpretations and poor business decisions.
Originally published: 26 July 2023
Last updated: 23 September 2024
