What is Real Estate?

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Chapter 1

• What is Real Estate?
• Land Fixtures
• Why is Real Estate Different?
• Real Estate is Unique
• What is Changing in Real Estate?
• R/E is being integrated into international
  capital markets
• Information technology is changing the ways real
  estate is traded and managed

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• Careers in Real Estate
• Broker, Residential, Commercial
• REALTOR
• Appraiser
• Mortgage Banker
• Developer

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Returns to Home Ownership

• Returns
• Imputed Rent Savings
• Capital Gains (250K Exclusion)
• Costs
• Property Taxes (Tax Deductible)
• Insurance
• Maintence
• Interest (Tax Deductible)

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Estimates of the Returns to Home Ownership

• L/V 0 70 80 90
• Mean 8.3 13.1 15.5 20.4
• Std. Dev. 1.1 3.0 4.1 6.7
• Note Assumes 5-year holding periods, 1978-2001,
  28-percent tax rate, 30-year mortgage

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Return Comparisons, 1978-2001(5-year holding
periods)

• Home Stocks CPI
• Mean 15.54 17.23 3.87
• Std. Dev. 4.12 4.25 1.69

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Return Comparisons
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Making Money Selling Real Estate
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Realtor Earning, 1998
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• Interesting Web Sites
• www.Realtor.com
• www.nahb.com
• www.appraisalinstitute.com
• www.nareit.org
• www.uli.org
• Homework Assignment
• Go to Realtor.com look up some homes in your
  neighborhood. Print out and hand in the listing.