Chpt 2 - Chapter 2: Value and Real Estate Decisions...

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Chapter 2: Value and Real Estate Decisions Objectives for this chapter… 1. Why is studying value so important? 2. What are the determinants of RE decisions? 3. How do we make RE decisions? 4. 5. 2 types of value 6. Cornerstone of RE valuation Value and Investment Decisions An investment decision is one that entails (1) significant initial $ costs now in return for (2) $ benefits in the future Significant, irreversible costs now Difficult to reverse quickly Benefits occur significant time into the future Trade current consumption for greater future consumption “Live like no one else now, so that later you can live like no one else” – Dave Ramsey Value and Investment Decisions Disagree with authors’ examples/definition 2 requirements for an “investment” $ Costs $ Benefits Pg. 19 example of purchasing a TV No $ benefits NOT an investment Ch. 2 Pg. 1 of 5 11/6/2009
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You buy a tv, you invest in your education Normal Business Decisions vs. Real Estate Decisions Normal business decisions Recruit Personnel Choose ways to generate business Choose marketing strategies or channels Select an organizational structure Select equipment Real Estate decisions (investment decisions) : Decisions concerning financial and non- financial actual real estate asset: Location Acquiring
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This note was uploaded on 11/05/2009 for the course ECON 4010 taught by Professor Staff during the Fall '08 term at University of Georgia Athens.

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Chpt 2 - Chapter 2: Value and Real Estate Decisions...

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