Chart: "Aspects of Real Estate"

By no means is this chart all encompassing or even necessarily the best-arranged. Nonetheless, it does show you the multi-facet nature of "real estate", the numerous issues involved, and the various participants and professionals engaged. Some of the terms here have a brief description (not necessarily an academic answer or definition required by examination questions) which will be shown when the term is clicked.

Descriptions for some of the Terms:

1. Real Estate: to most it means the building(s) (or chattels if you want to be technical) situated upon the land (lot). Food for thought = real estate is a bundle of rights e.g. the right to ingress/egress (enter and exit), the right to use, the right to sell, the right to let/rent out, the right to quiet enjoyment (not in the physical sense but not to be disrupted/disturbed unnecessarily) and so on. Without these, real estate may not be worth much.
   
2. Real Estate Development: rebuilding upon an existing lot/site or building new upon a virgin lot/site. Involves major construction activities and the land utilization is typically altered in terms of use, scale and/or landscape.
   
3. Real Estate Investment: acquiring existing developments and buildings for rental income and/or asset appreciation without involving major rebuilding or construction activities. There may be some refurbishing work, renovation and/or minor alterations.
   
4. Real Estate Management: includes managing real estate as financial assets (asset management), as business operations (property management, lease management, tenant management and so on), and as physical assets (building maintenance).
   
5. Title: in layman's term, proof of ownership/possession.
   
6. Freehold: the ownership is forever (perhaps subject to the timely payment of annual land tax, rates and so on. If not, there may be a chance for foreclosure or repossession) and this is not affected by a sale or the death of the original purchaser/owner.
   
7. Leasehold: the ownership is not forever. In fact and technically speaking, ownership does not exit. What exists is just the right of possession for a pre-determined/agreed period of time, usually in years. In short, it is a lease on the land/lot. When the lease expires, possession of the land goes back to the (real) owner (in many cases this may be the government or some public authorities) unless some form of extension is exercised or agreed.
   
8. Encumbrances: Defects in title, i.e. the ownership is not free and clear. Typical encumbrances may include mortgages (usually rid of when the mortgage is fully paid up or redeemed), building violations, or a claim on title by another party etc.
   
9. Capital Gains: in simplified terms, the difference between the acquisition (purchase) price and the disposition (selling) price. If the latter is larger, there is a gain. If not, there is no gain.
   
10. Depreciation: the lost in price/value o an asset due to a variety of reasons such as obsolescence (either not being in fashion anymore or its application taken over by another better invention etc), dilapidation (worn down), and the like. Generally, only the "building" portion can be depreciated, as land is deemed rather permanent. Depreciation is very useful in enhancing the cash flow of a real estate investment as the tax authorities usually allow it to be deducted as an expense yet without the owner really having to fork it out (though the capital gain, if any in future, would be higher). This is one advantage which real estate has over stock investment.
    
11. CMBS: stands for Commercial Mortgage-Backed Securities, a form of financing available for real estate in the world of capital markets. Mortgages are securitized and sold to investors. Just like stocks, there are solid ones and there are highly risky ones. Consult a finance expert for more details.
    
12. Subdivisions: in North America, this is usually what a typical land developer does. He/she would acquire a large tract of land and then "sub-divide" the land into smaller lots/parcels. The land developer would then sell these lots to say a home builder and/or to build the homes (or buildings) on them him/herself. The same may be applied to office or industrial properties yet the subdivided lot/parcel would be much larger than a typical residential lot. In Hong Kong, where most live in a high rise unit, subdivision is not commonly seen and the closest thing would be "strata-title".
    
13. Density: can be measured or indicated in a number of ways though at times this can also be a subjective element on whether a certain development is dense or not. Further, what is considered dense in one city may be regarded as very spatial in another. Indicative measures include the Plot Ratio (close to the FAR Floor Area Ratio commonly used in North America) = the total building floor area divided by the land (site) area, Site Coverage = the % of the land (site) area being covered by buildings, Number of Residents/Occupants per site area, Number of Families per site area and so on.
    
14. Site Planning: the placing and allocation of various buildings and facilities on a site. Naturally, this usually involves larger sites as the options for very small sites do not exist.
    
15. Massing: the 3-Dimensional allocation and placement of (permitted floor) "space".
    
16. House Form: Commonly seen ones = detached houses, bungalows (1-storey detached houses), semi-detached houses, town or row houses, and high-rise apartments or condominiums.
    
17. Project Managers: In real estate development terms, the project manager is responsible for managing and coordinating all necessary functions, processes, procedures, and professionals/people involved including government authorities, bankers, brokers and the like from inception to completion. Naturally, larger companies may have different managers handling the various development phases. Project managers may come from a variety of backgrounds, architects, surveyors, engineers, and so on. In North America, some may even be accountants, analysts or lawyers.
    
18. Town Planners: they are concerned with the urban planning and development aspects of a city. While many are focused on the physical planning aspect, there are also some who focus on the social planning aspect.
    
19. Architects: they design buildings. Naturally there is more to that, they need to supervise the construction, administer the contracts, and apply for various building permits and licenses. While most people would focus on the appearance of buildings, architecture is actually more a process of creating "space" in the best possible combination of aesthetics, costs and use.
    
20. Surveyors: there are several kinds of surveyors. The common ones include estate/valuation (technically called General Practice) surveyors (focus on land and real estate matters), quantity surveyors (focus on building economics and contractual matters), building surveyors (focus on building maintenance and regulations), and land surveyors (focus on land surveys and measurements).
    
21. Engineers: Generally involved in real estate development are the structural engineer (focus on the building structures), geotechnical engineer (focus on the soil and slope matters), civil engineer (focus on the bridges and roads where applicable), mechanical/electrical/building services engineer (focus on the various building systems including drainage, plumbing, ventilation, air-conditioning, electrical supply, telecommunications, cables and internet systems) and so on.
    
22. Landscape: usually called a landscape architect or consultant. He/she focuses on the landscape design, use and aesthetics of open spaces, suitability of various plants and trees, and so on.
    
23. Real Estate Brokers: or Agents. They are marketing experts and are knowledgeable of the latest prices and activities in the market sectors they specialize. They help people buy/let out and sell/rent real estate.
    
24. Analysts: In real estate terms, they are the number crunchers though analysis is much more than just number-crunching. Quantitative analysis is useful but it also has its limitations and the analytical methods can be simple or sophisticated. Common sense and a good business intuition also help. Moreover, analysis can be done on the macro-level, portfolio level and on the project level. Naturally, most analysts only cover a certain number of markets or segments of a market.
    
25. Obsolescence: In real estate or building terms, it means becoming "old" due to: (1) being out of fashion [design-wise], (2) being replaced by better buildings or inventions [function-wise], and (3) being really old and worn out [physical-wise].