Term | Definition |
What are the classes of real estate property? | 1. Real property- land+ everything permanently attached to land, including improvements.
2. Personal property (chattel)- everything not land or not permanently attached to land. Readily movable. Bill of sale= transfers ownership of personal property. |
Physical characteristics of land? | U- Uniqueness (Nonhomogeneity) [requires market be local; ea. parcel of land's location makes it unique]
P- Permanence (Indestructibility)
I- Immobility [causes market to be local in character & a market slow to react to s+d] |
Economic characteristics of land? | S- Scarcity
L- Location (situs)
I- Improvements
P- Permanence of Investment |
Concepts of land use and development: | -Highest & best use
-Land use controls
-Investment objectives
-Scope of real estate business
-Real estate market |
Highest & Best Use concept of land | Attained by intelligent use of capital, labor, & other resources to improve land and its productivity. Use that will provide property owner best possible investment return over time. Only 1 best use for specific land at a time & it changes w/ time. |
Land use controls:
#1: Public land use restrictions/controls | Public:
-city planning & zoning
-state and regional planning, building codes.
-suitability for occupancy requirements.
-environmental control laws.
- Also gov't ownership of land: public buildings, public parks, watersheds, streets, and highways. |
Land use controls:
#2. Private land use restrictions/controls | Private:
- protective or restrictive covenants made by developers.
-restrictive individual deeds (private deed restrictions requiring continuation or prohibition of a specified land use).
-use restrictions imposed on a lessee in a lease contract. |
Real estate investment objectives:
The 3 ways to profit from a real estate investment | 1. Appreciation
2. Positive Cash Flow - property's gross effective income >total operating expenses.
3. Tax Advantage - appreciation/gains being taxed @ capital gain rate < investor's marginal tax rate when property is sold + from prop. tax, insurance . |
Scope of real estate business and the real estate market | Specialties in r.e. include:
-brokerage (specializations include farm + land, residential, commercial, & investment property brokerage)
-property management
-appraising
-financing
-construction
-prop. development
-r.e. education
-gov't service. |
Factors affecting real estate supply | - labor force availability
- construction & material costs
- government controls
- financial policies |
Factors affecting real estate demand | - population
- demographics
- employment & wage levels |
Laws that affect real estate | - contracts
- state & local zoning
- fed and state environmental regulations & tax laws |
Supply and demand | when supply increases and demand remains the same, prices go DOWN
when demand goes down and supply remains the same, prices go UP |
9 types of housing | 1. single fam.
2. aparts.
3.condos
4.cooperatives (own stock in building not units)
5.Planned Unit Dev.(PUDs- com.w/markets, post office)
6.Mixed-Use Dev.(MUDs - houses + retail)
7.Modular Home / Manufactured (prefab)
8.Mobile Homes
9.Timeshares |
Housing affordability and factors for loans | FHA - Federal Housing Authority
VA - Dept. of Veteran Affairs
PITI - (Principle, Interest, Taxes & Insurance) - cannot exceed 28% of monthly gross |
6 types of real property | 1 - Residential
2 - Commercial
3 - Mixed-use (both)
4 - Industrial
5 - Agricultural
6 - Special Purpose (church, school, government) |