Essay about Real Estate Portfolio Valuation: Annotated Bibliography

We thank Piet Eichholtz, Pat Hendershott, Charles Ward, two anonymous referees, and participants at the Maastricht-Cambridge Property Investment Symposium for valuable comments and suggestions. We also thank Elvan Aktas for valuable research assistance and Piet Eichholtz and Han Op 't Veld of Global Property Research for assistance with the data. Additionally, we thank the Real Estate Research Institute for

An investor will view worth as the discounted value of the rental stream produced by the asset, whereas the owner-occupier will see the asset as a factor of production and assign to it a worth derived from the property 's contribution to the profits of the business. No doubt both groups of bidders will also be mindful of its potential resale price to a purchaser from the other group. The concept of the worth of a property is most important in markets that are underdeveloped in terms of liquidity and the separation of ownership and use rights. Here most transactions are based on owner-occupiers ' views of the worth of the property, i.e. the contribution it will make to business profit, as well as subjective issues such as status and feelings of security. Valuers, with hardly any transaction evidence, can only attempt to replicate these calculations of worth in arriving at an estimate of exchange price. One of the paramount concerns of the valuation profession is the need to ensure that information presented to a client is clear and unambiguous. Not only should all parties understand the terminology used, it is also important

Supply and demand play a major role in the value of real estate. The forces behind supply and demand include physical, economic, political, sociological, and location issues. The location of the subject property within St. Johns provides many positives with respect to value. First, the proximity to local highways not only provides for ingress and egress, but gives the subject neighborhood exposure to potential tenants or clients. It provides a quick means of transportation for employees or customers. Second, the location of St. Johns in proximity to Lansing and the rest of Michigan is an advantage. This proximity provides additional workforce, complementary businesses, and suppliers.

The real estate division was estimated to have a fair value of $13,890,000. This was determined by totaling the number of lots expected to sell within the next four years and multiplying it by the price per lot of $180,000. After determining total lot sales, a 20% discount rate was applied as suggested by current market conditions. Given the unique nature of the real estate development, it is not believed that there are any comparable developments to find a market multiple.

The supply and demand simulation was a simulation of GoodLife Management, a property management firm controlling all of the seven apartment complexes in the city of Atlantis. For the 9 year period in the simulation the housing market had many ups and downs because of businesses moving into the area bringing an increased amount of jobs, the change in consumer preferences and company expectations, and the policy changes induced from the government.

In this crazy world, it is important to find those who you can depend on- in life, in love, and especially in real estate. Finding the right group of people to network with and collaborate with is key to finding success in this field. In analyst Jonathan Littman’s article, “Real Estate Reinvented,” Littman documents information that he researched on Northern California’s Alain Pinel Realtors. An Alain Pinel Partner and the company’s President, Helen Pastorino, states that “ [she] believe[s] that the ‘every agent for himself’ hurts sales and [she has] quickly turned to using computers and networking to [her] advantage” (Littman). A successful real estate agent will not be afraid to collaborate and work with others, because he/she knows that

It is worth noting the difference between gentrification and “incumbent upgrading” in which current residents improve the neighborhood’s housing value with no apparent population change (McDonald, 1986). Furthermore, McDonald stated that the mere increase in value of real estate in a neighborhood does not qualify as gentrification. This is due to the fact that the increase in value can be the result of inflation in the housing market on a national scale. There are many theories of the causes of gentrification. Some believe that the younger or wealthier people move to urban neighborhoods as a way to reconnect with the community while gaining more cultural awareness. There is also the theory of the real estate having a low price tag. The low cost of land attracts buyers who are interested in renovating the business for a large financial

Access to major freeways makes the area a very desirable neighborhood. The vacancy rate is typically lower than surrounding areas of Mid-Michigan and should therefore help properties to have greater worth than other areas. The low turnover rate will cause improved properties to stabilize in value. As time goes on, some of the older buildings in the area which are reaching the end of their life cycle may need to be remodeled, enlarged, or replaced. Supply and demand seems to be in balance. This has resulted in the flattening of sale prices and rental rates for several years. No external obsolescence was observed either inside or outside of the neighborhood. All utilities are sufficient to cover the demands of potential buyers or tenants and should not have a negative impact on value. Overall, the neighborhood characteristics are deemed to positively impact the subject property market value with no external or economic obsolescence observed.

Every individual whether they are aware of it or not, base their decision-making on some form of statistical data. Simple everyday decisions are made through rationalizing a problem or opportunity, forming a hypothesis, analyzing information, and determining a decision based on the gathered information. For the purpose of practicality, Team A has chosen real estate market data gathered from the website for the Statistical Techniques in Business and Economics (2008) textbook to formulate and define a chosen problem, attempt to delineate the purpose of the research into the variables that affect

This case involves an investigation of the factors that affect the sale price of Oceanside condominium units. It represents an extension of an analysis of the same data by Herman Kelting (1979). Although condo sale prices have increased dramatically over the past 20 years, the relationship between these factors and sale price remain about the same. Consequently, the data provide valuable insight into today’s condominium sales market.

Supply and demand plays an intricate role in the amount, price, and availability of products and services. The applying supply and demand concepts simulation guides users through making decisions for Goodlife, a management company for 2 bedroom apartments in Atlantis. The simulation names the user the property manager; responsible for vacation residents, new pricing for units, and advertising. The property manager makes decisions in circumstances including the changing of supply cure, demand curve, microeconomics, macroeconomics, and the equilibrium of price and quantity. All of these decisions move the business along as conditions change around it.

There are three primary routes to establishing a real estate property values and these methods differ significantly. The most common for residential real estate is the determination of market value or the sales comparison approach. This method utilizes sales data to determine what other similar properties in the local market have sold for. Another method of determining value is through a cost approach which is more typical in new construction. For example, when a contractor builds a new house or structure they might charge for the materials and labor that was used plus some amount of

Government policies and subsides have a sizable impact on property price, and demand. The government can temporarily boost demand with tax credits, deduction and subsidies. From the customers point of view

There has been a significant increase in the use of AVMs in valuing properties for taxation purposes (RCIS 2013, Adair and McGeal 1988). This is primarily due to the somewhat cumbersome nature of the traditional single parcel appraisal method adopted by valuers, which is also very cost intensive (O’Neil, 2004).

A difficult characteristic to understand about the housing market is how a price is given for a particular house. That price will be designated to that particular house alone. All houses have various pricing, so I can’t always assume that one will cost more or less than any other. The pricing for houses vary based on their characteristics. Each characteristic must be analyzed to determine its contribution or detraction toward the price. I have taken some of these characteristics and modeled the relationship between them and the price of real estate for a specific area.