Characteristics of Real Property Flashcards

Characteristics of Real Property Flashcards Permanence of InvestmentThe capital and labor used to build an improvement represent a large fixed investment. Although even a well-built structure can be razed to make way for a newer building, improvements such as drainage, electricity, water, and sewerage remain. The return on such investments tends to be long term and relatively stable.IndestructibilityLand is considered indestructible, even though it is subject to both natural and human forces. Land can be denuded of vegetation by strip mining, paved over for a highway or building, or eroded by a flood or dust storm. The geographic location will still remain, whatever its condition.This permanence of land, coupled with the long-term nature of most improvements, tends to stabilize investments in real property.Real property possesses?seven basic characteristics that define its nature and affect its use. These characteristics fall into two broad categories-economic and physical.ImmobilityIt is true that some of the substances of land are removable and that topography can be changed, but the geographic location of any given parcel of land can never be changed.It is fixed and therefore immobile.Uniqueness, which is also known as nonhomogeneity, isthe concept that no two parcels of property are exactly the same or in the same location. The characteristics of each property, no matter how small, differ from those of every other, and each property has its own geographic coordinates. An individual parcel has no substitute because each is unique.ImprovementsBuilding an improvement on one parcel of land can affect the land's value and use, as well as that of neighboring tracts and whole communities. For example, constructing a new shopping center or selecting a site for a nuclear power plant or toxic waste dump can dramatically change the value of land in a large area.The four economic characteristics of land that affect its value as a product in the marketplace are ?scarcity, improvements, permanence of investment, and area preference.Area Preference Also known as situs ("place") s commonly referred to as "location, location, location." This economic characteristic refers not only to geography but also to the preference for a specific area. Area preference is based on several factors, such as convenience, reputation, and history. It is the unique quality of these preferences that results in the different price points

for similar properties. Location is often considered the single most important economic characteristic of land.Land has three physical characteristics: immobility, indestructibility, and uniqueness.