how is the term "real estate" used?how is the term "real estate" used?how is the term "real estate" used?how is the term "real estate" used?how is the term "real estate" used?how is the term "real estate" used?how is the term "real estate" used?how is the term "real estate" used?how is the term "re...
✓ ~~~ physical things, such as automobiles, clothing, land, or buildings
intangible assets
✓ ~~~ nonphysical things which include contractual rights (e.g., mortgage and lease
agreements), financial claims (e.g., stocks and bonds), interests, patents, or trademarks
how is the term "real estate" used?
✓ ~~~ 1. used to identify tangible assets of land/buildings
2. used to denote the bundle of rights associated w/ ownership of assets
3. used in reference to the business of real estate
improvements on land vs improvements to land
✓ ~~~ ON land - fixed structures such as buildings, walls etc
TO land - include components necessary to make the land suitable to be used such
as infrastructure
land
✓ ~~~ - often used to refer to a building site, lot, etc. and not just land
,raw land
✓ ~~~ land that does NOT include structures or any improvements
real property
✓ ~~~ rights associated with ownership of land and all permanent attachments to land.
*used interchangeably with real estate
personal property
✓ ~~~ objects that are moveable and not permanently attached to the land/structure,
including furniture and tenant fixtures that are often purchased along w/ real property
acquisitions.
acre
✓ ~~~ 1 acre = 43,560 sq ft
640 acres = 1 sq mile
user markets
✓ ~~~ when users are competing for PHYSICAL locations/spaces
capital markets
✓ ~~~ FINANCIAL sector of the economy that allocates financial resources among
households/firms that require funds
- participants invest in stocks, bonds, etc. to receive a fin. return on their investment
capital market: equity interests
, ✓ ~~~ owners of the real estate
- these people get their ROI through rent, price appreciation, etc.
capital market: debt interests
✓ ~~~ the lenders
- hold claims to interest on the borrowed funds that people use to invest, etc.
capitalization rate
✓ ~~~ ratio of a property's annual net income from rental operations to it's value
txtbk def: the percentage that is obtained when the income produced by a property
(or a specified interest in a property) is divided by the value or sale price of the
property (or the specified interest in the property).
role of government in real estate
✓ ~~~ - local govt has the most influence
- state govt has the least effect
- national govt also has significant impact
how does the national government influence real estate?
✓ ~~~ through income tax and housing subsidy programs
how is RE unique?
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