FINC 349 CHAPTER 9

This set of flashcards covers key concepts, terms, and principles discussed in the real estate lecture, focusing on property types, financing, cash flow management, and market dynamics.

What are the two main types of residential properties discussed?

Single-family housing and multifamily housing.

Why is it important to combine theory and quantitative skills in real estate studies?

To enhance understanding and application in practical scenarios.

What is a 'turnkey' property?

A property that is built and ready for operation without further modifications.

What is the significance of understanding cash flow in real estate?

It influences decisions on financing, investment viability, and overall project profitability.

What distinguishes residential mortgages from commercial mortgages?

Residential mortgages are typically for individual homeowners, while commercial mortgages are for properties used for business purposes.

Why do banks prefer fixed-term, long-term tenants for financing?

They provide stability and predictability of cash flow, reducing risk.

What can affect vacancy rates in real estate?

Market conditions, competition, and the attractiveness of the property to potential tenants.

What does it mean to perform due diligence in real estate?

To thoroughly investigate and assess a property before making a purchase or lease.

What is the main goal of property owners in terms of sales revenue?

To increase sales revenue while effectively reducing operational costs.

How does competition influence pricing power in real estate?

Increased competition may limit pricing power, forcing property owners to adjust rents to maintain occupancy.