FINA 210 Lecture Notes - Lecture 1: Income Approach, Cash Flow, Canadian Real Estate Association

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Rei comes with risk and return that depend on market"s cycle. Rei cycle experiences excess when supply of properties is high (resulting in decrease in property values and indicates good time to buy but not sell). Crucial to rei: understand rei market and assess cycle"s stage. Factors affecting real estate market: interest rates, local & provincial, property location, taxes, legal restrictions economy, population mobility, vacancy, public opinion of property. Compared to other types of investment, rei is stable and secure. Basic knowledge is essential to make sound decisions. Although some reis do not require that you be an expert on real estate, you will need to allocate time to research and planning to reduce investment risks and ensure the expected outcomes. The canadian real estate association found that residential real estate is increasing in value an average of 5% per year.

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