Real Estate 2

Front 1

Lesser

Back 1

Tenant

Front 2

Lessor

Back 2

Landlord or owner

Front 3

Lease hold estate

Back 3

tenants right to occupy or use the property

Front 4

Month to month

Back 4

a periodic estate that continually renews itself for like periods of time until terminated by the tenant or land lord

Front 5

Elements of a Lease

Back 5

1. Name of landlord and Tenant
2. Address and description of the property
3. Agreement to Convey
4. Payment provisions
5. Starting date, duration of term, end date
6. Signatures and witnesses

Front 6

Gross lease

Back 6

Tenant pays a fixed amount
(Full service)

Front 7

Net lease (tiple net lease)

Back 7

tenant pays base rent plus all expenses, property taxes, insurance, maintenance

(Only walls and Roof)

Front 8

Assignment

Back 8

the total transfer of the Lessee's rights to another party

Front 9

Sublet

Back 9

transfer of only a portions of the lease rights

Front 10

Sublessee

Back 10

a lessee who rents form another lessee

Front 11

Sublessor

Back 11

a lessee who rents to another lessee

Front 12

Ground Lease

Back 12

Lease of ground

Front 13

Real estate value

Back 13

the present monetary worth of benefits arising from the ownership of real estate

1. income
2. appreciation
3. use
4. tax benefits

Front 14

Anticipation

Back 14

the benefits a buyer expects to derive from a property over a holding period influence what the buyer is willing to pay for it

Front 15

Substitution

Back 15

a buyer will pay no more for a property than the buyer would have to pay for an equally desirable and available substitue property

Front 16

Highest and best Use

Back 16

theoretically, there is a single use that produces greatest income and return

Front 17

Progression and regression

Back 17

the value of a property influences, and is influenced by, the values of neighboring properties

Front 18

Assemblage

Back 18

Conjoining of adjacent properties, sometimes creates a combined value greater than before

Front 19

Market value

Income rent
--Vaccancy

Back 19

price willing buyer and seller would agree on given: cash, exposure, information, arms length, marketable title, no hidden influences

generally used for appraisals and brokers' estimates

Front 20

Reproduction Value

Back 20

Value based on the cost of constructing a precise duplicate of the subject property's improvments

Front 21

Salvage Value

Back 21

Nominal value of a property that has reached the end of its life

Front 22

Leasehold Value

Back 22

an estimate of the market value of a lessee's interest in a property

determined by if you got a good rate or not

Front 23

The appraisal and its uses

Back 23

used in real estate decision-making to estimate on or more types of value

used by mortgage lenders, government agencies, investors, utility companies and real estate buyers/sellers

Front 24

3 value approaches

Back 24

1. Sales comparison approach
2. the cost approach
3. Income capitalization approach

(No more than 6 months)

Front 25

Sales comparison approach

also called market data approach

Back 25

1. Identify comparable sales
2. Compare comparables to the subject and make adjustments to comparables
3. Weight values indicated by adjusted comparables for the final value estimate of subject

Front 26

CMA

Back 26

Comparable market analysis

use this when trying to figure out what you want to sell it for

Front 27

Adjustment criteria

Back 27

Time of sale
location
physical characteristics
Transaction characteristics

Front 28

The Cost approach

Back 28

Types of cost appraised (Reproduction&Replacement)
Depreciation
Steps in approach
(used for recently built property or special purpose property)

Front 29

Cap Rate

Back 29

NOI
-------
Cap rate

Front 30

GRM

Back 30

used primarily for properties that produce or might produce income but are not primarily income properties
price / monthly rent

Front 31

MIA

Back 31

Masters Institute Appraisers

Front 32

Weighing adjustments

Back 32

best indicator has fewest and smallest adjustments, least net adjustments from sale price

Front 33

Income approach

Back 33

used for income properties and in a rental market with available rental data

Front 34

Rewards

Back 34

investors increase wealth through income, appreciation, leverage, and tax benefits

Front 35

Risk

Back 35

(market risk) changes in supply and demand
(business risk) change in business connected
(Purchasing power risk) change in value of money
(financial risk) change in interest rates

Front 36

Syndicate and Partnership

Back 36

a group of investors pool resources to buy, develop and/or operate a property

Front 37

REIT

Back 37

investors buy certificates in a trust that invests in mortgages or real estate

Front 38

Taxable income

Back 38

gross income received minus allowable expenses, deductions and exclusions

Front 39

Interest

Back 39

Mortgage interest is deductible from annual gross income from a property subject to limitations

Front 40

Appreciation

Back 40

not a true measure of investment return

Front 41

Deductibles

Back 41

for non-income properties, primary tax benefit is annual deduction for mortgage interest

Front 42

Appeals

Back 42

owner has certain period of time to protest assessed value of his property

Front 43

Homestead exemtion

Back 43

a tax exemption of a portion of the assessed value of a property owned and occupied as a family home

Front 44

Ad Valorem Taxation

Back 44

property tax levied annually on the taxable value of a property in order to help fund government and public services