-residential subdivision -> need family/individuals to buy the properties
-shopping center --> need customers
Ways to minimize market risk
- critical: understand that some locations are better than others - avoid projects with high market risk (hotels/motels) & (restaurants & entertainments facilities) - avoid projects with prospective major change (lease rollover & major renovations)
Why are leases better than hotels/motels
lease -> can be guaranteed relatively
hotels/motels -> can reset the market nightly, BUT there is high risk
to determine market value, one of the most critical issues is ?
evaluating the market for the property in order to forecast future cash flows
what is one of the major risks of real estate?
it takes a long time to build & markets can shift quickly