Real Estate 306 Midterm 1: chap 1-3
- University of Wisconsin - Madison
- Real Estate And Urban Land Economics
- Real Estate And Urban Land Economics 306
- Real Estate 306 Midterm 1: chap 1-3
Last Modified: 2011-07-08
Related Textbooks:Real Estate Principles: A Value Approach (Mcgraw-Hill/Irwin Series in Finance, Insurance, and Real Estate)
2) Real estate is the SPACE - the enclosure that shelter activities
2) right from owning property
3) profession and an industry
- Tangible versus intangible
- Improvements on the land, improvements to the land
- Real Property versus personal property
- right to use/occupy/enter it
- right to sell it
- right to lease it
- right to give it away
- right to do all or none of these things
- Leased fee and leasehold estates: when a property is leased, the right to use/occupy is transferred to the tenant. The landlord has leased fee interest, and the tenant has a leasehold interest.
- Capital markets: Real estate as alternative investment
- Government: zoning, buildings codes, property taxes...etc.
- markets hardly ever in balance
- incomplete market information
- high value asset
- long economic life
- high transaction cost
- monetary benefits: annual income (NOI) and proceeds from sale
- incremental decisions
- Some RE investments are more risky than others (hotels, restaurants)
- RE is illiquid - can't sell quickly (may have fewer buyers)
- uncertainty of cost (renovation, land dev)
- uncertainty of value (future demand - SP, rents)
- more risk lowers value of property (higher return/yield required)
- Appraisal if often for "market value": most probable selling price, typical buyer and seller
- Rights: claims or demands that our gov't is obligated to enforce
- Right to give real estate value include: the right to prevent otehres from using our property without permission, the right to use the property ourselves, the right to dispose of it as we wish
- Personal Property: All other property, personal and household goods, intellectual property, music
- Restrictive covenants: Covenants that impose restrictions on land use; created at conveyance of land to a new owner
- liens: an interest in property as security for an obligation
- Easements typically "run with the land" the rights and obligations are inseparable from parcel involved.
- two methods from creation
1) restriction in a deed conveying a single parcel of land to a new owner
2) Restrictions impose on a entire subdivision at its creation
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