Skip to 0 minutes and 5 secondsWhat do we mean by property? We mean real property, or real estate as it is often known. This is land with or without any improvements, and this is what the course will concentrate on. Land is a physical product that even in its natural state can be a source of wealth. Sometimes, an improvement is made to the land that makes that piece of land more usable. In fact, improvements can be to the land or on the land. Improvements to the land generally include utilities and services, such as electricity, telephone, water, and sewerage. Improvements on the land are buildings or structures, such as houses or apartments, sheds, pergolas, and swimming pools.
Skip to 1 minute and 2 secondsSometimes, the term property can also refer to plant and machinery, art, jewellery, and shares. These might be given the term tangible property to reflect the fact that they are touchable, but we will not concentrate on these property types in this course. We will work on real property, or real estate.
Adding value to property
Real Estate is more than just land or buildings.
When we talk about property we mean “Real Estate” which is the land, as well as the assets (improvements) on the land and the utilities that are available to the land.
Does the value of the property increase as we add the improvements?
Well, yes if those improvements are adding to the “highest and best use” (HBU) of the land, then the property value should be improved but if they are not, then the property value may not be improved.
Take for example an existing development of 10 apartments on a site. There is some empty land around the apartments. Including undercover car parking to the empty land would be a valuable improvement, adding to the HBU. Filling the space with a rock-garden or perhaps a fishpond would cost money to do but may potentially decrease the value of the site (due to safety and maintenance issues.)
Consider the different elements that give land value. Does “raw” land have a significant value in all geographical locations? Explain why/why not.