Real Estate Investment & Finance: Key Concepts

These flashcards cover key terms and concepts in Real Estate Investment and Finance, focusing on pricing, investment strategies, and tax considerations.

Value

Determined by the demand and supply of single-family residences (SFR) in the local market.

Demand Factors

Includes population growth, household formations, employment, household income, and rent costs.

Supply Influences

Factors affecting housing availability, including housing starts, existing home sales, zoning, and building codes.

Market Value

The most probable price under competitive market conditions.

Valuation Methods

Includes market comparison, cost method, and income method.

Comparables

Recently sold similar properties used to estimate the value of a property being appraised.

Cost Method of Valuation

Estimates value by accounting for costs of a new property, depreciation, and land value.

Gross Rent Multiplier (GRM)

A ratio that compares sales price (P) to monthly rental income (r), used for estimating property value.

Distressed Property

A property below market value due to various reasons, such as inability to make mortgage payments or bankruptcy.

Capital Gain Exclusion

A tax benefit allowing $250,000 exclusion for singles and $500,000 for married couples, under certain conditions for property sales.