Two properties have been presented as possible investments. Careful consideration must be made to determine which of these assets is the worthiest investment. Before an intelligent decision can be made on which property to choose, the houses themselves must be inspected, the economic and social position of each house’s location must be analyzed, and lastly, the market for properties of the same size and location must be investigated to determine the potential profit of the properties.
Property A
Of the two options presented, the first is a 1,700-square-foot home in Chapel Hill, North Carolina. This house has three bedrooms and two bathrooms and is meant for a single family. The only thing keeping this property from belonging to an investor is $125,500 cash. The single picture on the advertisement for this property displays a quaint little blue house with white trim. The house has two large windows on either side of a chestnut-colored door and appears to have a small front porch. In the front yard there are two medium-size trees close to the front of the house, one large tree to the left of the house, a gate, most likely leading to a backyard, to the right of the home, a patchy lawn that surrounds a brick walkway up to the house and a well-groomed hedge that borders the yard. Although there are no pictures of the interior of this home, the article states that “[i]t needs some TLC, with outdated appliances, cosmetic changes and other upgrades required.” Overall, this property seems structurally sound, although some capital will be required to transform it into something that would catch a potential customer’s eye.
After looking over the potential investment with a hypothetical microscope, it is time to zoom out to a bird’s-eye view. After all, the chances of selling or renting this asset could depend tremendously on where it is and what circumstances are taking place
A single family home located at the corner of Hammond Street and Marengo Avenue. On the Hammond Street side, the house has a wooden fence along the north side of the property.
An employee of ABC Company, Luke is in charge with a project of developing new purchased land. The company is planning to build an adult entertainment retail store which confidently lay near where his brother, Owen, lives. If the plans are announced to the public, the property of the surrounding neighborhood will drop significantly. What concerned Luke is that Owen just told him about the offer to sell his house at a decent price compared to the current real estate market. However, Owen is considering if he should wait for a couple year and sell his house later at a higher price as the estate value may increase.
The housing market is very unique as unlike other goods and services, houses have permanence, it is a fixed location good causing the rules of supply and demand to be taken to new extremes. In the case of the Toronto housing market we can view in almost real time the role supply and demand play on he ever increasing house prices, additionally the fundamental economic issue of scarcity is made extremely apparent by the limited size of the city of Toronto.
Rebecca Young has finished taking her Master of Business Administration and decided to move to Toronto in May 2013. She moves to a new place to follow her desire on finding a new job in investment banking. She rents a spacious condominium with two bedrooms in it with the rents of $ 3,000 per month. In July 2014, the same condominium unit next to her condominium are decided to be sold. Young believed that she could afford the condominium for $ 600,000. However, she felt that she bought a condominium that will not meet her long-term needs. Thus, Young decided to sell it in two to ten years. Analysis of Young's decision to buy or rent a condominium from the quantitative side is the suitable way to get the best financial decisions.
This paper is written to provide a reasonably comprehensive overview of Section 1031 of the IRC as it pertains to real estate transactions, and to offer some thoughts on the wealth-creation advantages that 1031 Exchanges offer.
value of that property to be much lower. Since the property was a dilapidated building in a bad
Investment opportunities all over the world are unending. There are millions of products and services that are potential game changers for the Embry Investment Group. My job as your consultant is to analyze the market and recommend the best possible investment for today and the future of the Embry Investme...
In valuing the developable land at Canary Wharf, there are several factors to take into account. Namely, it is crucial to decide on an appropriate rate at which to discount the projected cash flows for the property. The developable properties of Canary Wharf come with considerable risk. For example, the London office market downturn, as well as significant market hits for the large financial services tenants of Canary Wharf, presents serious tenant lease up and lease covenant negotiation risks. How long will it take to attract quality tenants to the buildings, especially as financial services tenants are currently stressed? Additionally, the requirement for further planning consent on the buildings indicates that construction on three of the sites can not commence for a number of years. How can one accurately predict the market in the future? Will the London Office market significantly improve or continue to decline? What will interest rates look like? Songbird must consider the risk of valuing such sites several years into the future. Further, Songbird must consider the weighty transportation risk. If the Crossrail project does not come to fruition in a timely manner with necessary approvals, development will not proceed as planned, causing cost overruns and heavy construction delays. Assuming that Canary Wharf is able to get the necessary transportation approvals, Canary Wharf's projected cash flows should be discounted at 12.5% in order to mitigate risks to be faced. Given this discount rate, as well as considering all taxes, debt obligations, rents and rent-free periods, and all construction costs, an appropriate bid on the developable sites at Canary Wharf is ₤809,000 (the Net Present Value of the cash flows, discounted at 12.5%). Please see Exhibit 1 for a detailed pro forma of all projected cash flows.
The following essay will expand on the usefulness and flaws of CAPM and other asset evaluation frameworks and in the end showing that despite all the evidence against CAPM it is still a useful model for determining asset investments.
Most people, today, are looking forward to buying their first property. When individuals decide to buy a house those individuals would have to look at all their options and all the advantages and disadvantages that come from purchasing a house. The economy plays a huge role in the decision whether people will purchase a house, purchase a condominiums, or rent property.
One of the key areas of long-term decision-making that firms must tackle is that of investment - the need to commit funds by purchasing land, buildings, machinery, etc., in anticipation of being able to earn an income greater than the funds committed. In order to handle these decisions, firms have to make an assessment of the size of the outflows and inflows of funds, the lifespan of the investment, the degree of risk attached and the cost of obtaining funds.
As a requirement in MMP111 Introduction to Property, this assignment will examine and value a residential home located in Altona North. The physical condition of the house will be evaluated, and after looking at the various factors likely to influence on the va...
Ross, S. A., Westerfield, R. W., & Jordan, B. D. (2011). Essentials of Coporate Finance (7th ed.). New York, New York, US: McGraw-Hill/Irwin. Retrieved January 19, 2014
Home loans, or mortgages, use a borrower's home for collateral. This home can be a single-family house up to four-unit property, as well as condominium or cooperative unit. Lenders fund home loan, but both the lender themselves and broker who act on behalf of the lenders originate.
to where it can be sold. With a budget of £5 million, I have also