NATURE AND ECON Flashcards
real vs personal property
real= immovable personal= movable
tangible vs intangible property
tangible: physical (land and buildings)
intangible: nonphysical (stocks, bonds, copyrights, patents, tms, contracts and BOR)
what is real estate?
REAL PROPERTY of both TANGIBLE AND INTANGIBLE PROPERTY
real estate as intangible property
improvements TO land
infrastructure
excavation
utilities
storm water
raods, curbs, gutters, sidewalks
improvements ON land
buildings + other structures (vertical improvements)
land
undeveloped
developed
an acre = ?sf
43,560 sq ft (football field w out end zones)
real estate as intangible property
BOR associated w tangible property
- possess the property and exclude others (us over john)
- occupy/use/enjoy (quitely)
-dispose (lease/gift)
- pledge as collateral
-extract (minerals, farming)
-control by govt and private
bundle posessed by multiple holders at same time
specific
RE economics: 3 markets
user market
capital market
property market
(interaction between user and captial)
user market
supply/demand for physical space and resulting rental rates and housing values
always pressured toward equilibrium
supply <–>demand
capital market
supply/demand for $$$ and resulting required investor returns
forms of capital: equity (owner) and debt (lender)
equity investors return –> property cf (sales/rents)
debt investors return –> loan payments (principle/interest)
property market
cash flows from user market and required investor returns from capital market determine investment property values
govt role in econ
always!
granting/enforcing property rights
regulating many aspects of RE
providing essential infrastructure/services
heterogenous product
every property is unique
value varies by location
cant import land into high demand mkt
LOCATION, LOCATION, LOCATION
all about ACCESS!!
(views, topography, ingress/egress, tangible attributes/constraints)
figurative (service, transportation, customers, suppliers, intangibles we want in relation to our use)
source of capital
public
- ie shares
-low cost, highly liquid, efficient
-forms: equity: re investment trusts. debt: REIT and mortgage backed securities
private
- capital invested in private entities (joint venture)
government sector
levels of govt and respective influence
- local: cities/counties have the greatest influence (land use and construction regulation, infrastructure/services)
- federal: limited but important (tax, finance, envt reg)
- state: similar to fed; but primary in regulating professions
enables user/capital markets
- private property rights
lots of regs
- provision of services and public infrastructure
