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70 Cards in this Set
- Front
- Back
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City planning commissions |
are delegated final authority for subdivision plat approval, site plan approval, and sign control. |
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Basic background studies
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include population background studies, economic base studies, existing land-use studies, physiographic studies, recreation and community facilities studies, and thoroughfare studies.
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Economic base studies
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analyze the effect of base-industry employment in the area. Base industries are those industries that attract outside money to the area. Service industries are those establishments whose customers are primarily local residents.
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Zoning ordinances
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authorize the segmentation (dividing) of a community into districts or zones in keeping with the character of the land and structures and their suitability for particular uses to protect against uses that might reduce the value of neighboring properties.
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Building codes
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protect the public health and safety from inferior construction practices. The Florida Building Code is a statewide building code.
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Residential zoning regulates
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density, meaning the number of homes per acre. Commercial zoning regulates intensity of use, such as vehicular traffic generated by a commercial enterprise. |
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A buffer zone
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is a strip of land separating one land use from another.
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The zoning board of adjustment
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handles appeals and requests from property owners for zoning changes.
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Variances
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allow property owners to vary from strict compliance with all or part of a zoning code because to comply would force an undue hardship on the property owner.
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Special exception
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is permission to build or to use property in apparent conflict with existing zoning ordinances.
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Nonconforming use
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is continuing land use that is not in compliance with a newly enacted zoning ordinance.
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A planned unit development (PUD)
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is a self-contained development planned under special zoning ordinances that allow maximum use of open space by reducing lot sizes and street sizes.
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Zero lot line
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is a term used to describe the positioning of a structure on a lot so that one side rests directly on the lot’s boundary line (no setback requirement).
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Environmental impact statements
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summarize the effect that proposed development will have on the surroundings. |
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The five characteristics of the real estate market are |
(1) immobility of real estate; (2) a market that is slow to respond to change in supply and demand; (3) land that is indestructible; (4) the uniqueness of real estate; and (5) government controls that influence the market through zoning, building codes, taxes, and so forth. |
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Supply
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is the amount and type of real estate available for sale or rent at differing price levels in a given real estate market. Variables that influence supply are availability of labor, availability of construction loans and financing, availability of land, and availability of materials.
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Demand
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is the desire and ability to purchase or rent goods and services. Variables that influence demand are price of real estate, population numbers and household composition, income of consumers, availability of mortgage credit, and consumer taste or preferences.
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A buyer's market
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occurs when the supply and demand equilibrium is upset by excess supply (supply exceeds demand).
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A seller's market
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occurs when the supply and demand equilibrium is upset with excess demand (demand exceeds supply).
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A vacancy rate
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is the percentage of rental units that are not occupied. |
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Property taxes
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are payable for the current year on or after November 1. Unpaid property taxes become delinquent on April 1 of the following year.
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Assessed value
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is the value of a property established for property tax purposes. Property owners use a three-step procedure to protest the assigned assessed value: (1) contact the county property appraiser, (2) appeal to the Value Adjustment Board, and (3) file a suit in court (certiorari proceeding).
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The Value Adjustment
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Board is made up of five members: two county commissioners, one school board member, and two citizen members.
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Immune properties
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consist of city, county, state, and federal government properties. Immune properties are not assessed and are not subject to taxation.
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Exempt properties
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include property belonging to churches and nonprofit organizations. Exempt properties are subject to taxation, but the owner is released from the obligation.
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Partially exempt property
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is subject to taxation, but the owner is partially relieved of the burden. Taxable value is determined by beginning with assessed value and subtracting appropriate exemptions.
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Homestead
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Florida residents who hold title to a home in Florida and use the home as their permanent residence may homestead the property. Homeowners are entitled to a $25,000 homestead exemption from the assessed value of the home for city, county, and school board taxes. Homesteaded properties with an assessed value of $75,000 or more are entitled to an additional $25,000 homestead exemption from city and county taxes (but not school board taxes).
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Homestead
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An additional $500 exemption from the assessed value of homesteaded property is available to widows and widowers, legally blind persons, and nonveterans who are totally and permanently disabled. An additional $5,000 exemption is available to veterans who are at least 10% disabled by military service–connected misfortune.
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Florida’s Green Belt Law
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shields agricultural property from higher tax assessments.
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The Save Our Home amendment
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caps how much the assessed value of homesteaded property may increase each year to 3% annually or the CPI, whichever is less.
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A mill
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is one one-thousandth of a dollar or one-tenth of a cent. Cities, counties, and school boards are capped at a basic real property tax rate of no more than 10 mills each. |
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Special assessments |
are one-time taxes levied on properties to help pay for a public improvement that benefits the property. A special assessment becomes a lien on the property. |
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Property taxes
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constitute a lien superior to all other liens on real property. Property taxes become a lien on January 1 of each year. |
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Property owners who itemize deductions may
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deduct interest, property taxes, and mortgage origination fees on a principal residence and second home, and interest on a home equity loan.
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Deductions from taxable income on investment property include |
operating expenses (but not reserve for replacements), financing expense, and depreciation. |
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Depreciation |
is a means of deducting the cost of improvements to land over a specified time. The land itself is not depreciable. Depreciation is calculated using the straight-line method; an equal amount is taken annually over the useful life of the asset. The IRS has established the useful life of 27.5 years for residential rental property and 39 years for nonresidential income-producing property. |
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Real estate investment trusts (REITs)
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offer investors the opportunity to invest in a pool of income-producing properties under professional management.
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Investors can choose from several types of real estate investments:
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residential, commercial, industrial, agricultural, and business opportunities.
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Advantages of real estate investment include the following:
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good rate of return, tax advantages, hedge against inflation, leverage, and equity buildup.
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Disadvantages of investing in real estate include the following:
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illiquidity, local market, need for expert help, management requirements, and risk.
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Destination properties
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include service industries that support the needs of the local community.
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Origin properties
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originate a product (export activities) to seek an income stream from outside the local community.
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Investment value
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is the worth of a building or property to an individual investor based on that investor's individual standards for achieving a goal.
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Risk
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is the chance of losing all or part of an investment. Static risk is risk that can be transferred to an insurer. Dynamic risk arises from the continual change in the business environment. Dynamic risk cannot be transferred to an insurer. |
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Risk associated with general business conditions include the following:
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business risk, financial risk, purchasing-power risk, and interest-rate risk. |
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Leverage
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is the use of borrowed funds to finance the purchase of an asset. Positive leverage occurs when the benefits exceed the cost of borrowing. Negative leverage occurs if the borrowed funds cost more than they are producing. |
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An asset
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is anything of value. A tangible asset can be touched and has actual substance. An intangible asset has value but does not have physical substance, such as the goodwill of a business. |
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The major lot types are the following:
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corner, interior, T-intersection, cul-de-sac, flag, and key.
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Two types of residential foundations commonly used in Florida are
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(1) pier and (2) slab-on-grade. Pier foundations are used in coastal and flood-prone areas.
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Three types of wood-frame construction are
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(1) platform, (2) balloon, and (3) post-and-beam. Platform is the most common of the three types.
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Roof styles include the following:
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gable, hip, saltbox, shed, flat, gambrel, and mansard. A dormer is a projection that extends out of the roof to provide additional light and ventilation. The pitch of a roof is its slope.
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R-value
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refers to the effectiveness of insulation and is measured by its resistance to heat flow. The higher the R-value, the better the energy efficiency.
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Today's homes
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typically have electrical systems that provide 120-volt circuits plus 240-volt circuits for large household appliances. Circuit breakers are used to protect an electric circuit from damage caused by too much current. Ground fault interrupters (GFIs) are required in kitchens and bathrooms to protect a home's occupants from possible electrical shock.
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Window styles include the following:
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fixed, awning, casement, jalousie, sliding, hopper, center pivot, and double- or single-hung. Single-hung windows have a lower sash that moves up and down and are most common today. |
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Real estate licensees who conduct real estate appraisals
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are required to comply with USPAP. Appraisal reports involving a federally related transaction must be prepared by a state-certified or licensed appraiser.
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Market value
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is the most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale, with the buyer and the seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus.
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Value
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is determined by what consumers are willing to pay in the marketplace. Price refers to the amount of money actually paid. Cost is the total expenditure to create the improvement.
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An overimprovement
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occurs when an owner invests more money in a structure than the owner can reasonably expect to recapture.
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To have value, goods and services must possess four traits:
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(1) demand, (2) utility, (3) scarcity, and (4) transferability.
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Highest and best use
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is the most profitable use of a property. The use must be legally permissible, physically possible, and financially feasible.
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The three approaches to estimating value are
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(1) sales comparison approach, (2) cost-depreciation approach, and (3) income capitalization approach. The principle of substitution is the basis for all three approaches.
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The sales comparison approach
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compares similar properties to the subject property. The comparable properties’ sale prices are adjusted upward or downward to reflect differences between each comparable and the subject property. If a comparable is superior to the subject property on a given feature, a downward adjustment is made to the comp. If a comparable is inferior to the subject property, an upward adjustment is made to the comp. The adjusted sale prices of the comparables are reconciled using a weighted average to estimate the market value of the subject property.
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The cost-depreciation approach
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estimates the market value of a property based on the cost to buy an equivalent site and to reproduce the structure as if new, less depreciation. Reproduction cost is the amount of money required to build an exact duplicate of the structure. Replacement cost is the amount of money required to replace a structure having the same use and functional utility as the subject property but using modern, available, or updated materials.
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The three methods used to estimate reproduction cost are
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(1) quantity survey method, (2) unit-in-place method, and (3) comparative square-foot method.
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Depreciation
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is the loss in value. Accrued depreciation is the total depreciation that has accumulated over time. Depreciation is curable when a building component has been added or repaired and the owners are able to get their money back in added value. If the owners are not able to recoup the cost of the repaired or added item, it is said to be incurable depreciation.
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The three major causes of depreciation are
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(1) physical deterioration, (2) functional obsolescence, and (3) external obsolescence.
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The lump-sum age-life method of estimating depreciation
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is based on a ratio of the property’s effective age to its economic life. Effective age is the age indicated by a structure’s condition and utility. Total economic life is the total estimated number of years that a structure is expected to contribute to the property’s value.
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The income capitalization approach
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develops an estimated value based on the present worth of future income from the subject property. The approach capitalizes net operating income into value.
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Potential gross income (PGI)
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is the total annual income a property would produce if it were fully rented and no collection losses were incurred. Effective gross income (EGI) is calculated by subtracting vacancy and collection losses from the PGI. Net operating income (NOI) is the income remaining after subtracting operating expenses from EGI. The three categories of operating expenses are (1) fixed, (2) variable, and (3) reserve for replacements.
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The gross rent multiplier (GRM)
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is the ratio between a property’s gross monthly rent and its selling price. The gross income multiplier (GIM) is the ratio between a property’s gross annual income and its selling price. |
