How Did We Get Here? The History Of The Housing Market Told Through Tweets

[Groman Roland]

Let's start by using several examples of calculus that we can apply to investment speculation (i.e. the construction of new homes). It's obvious that a builder is looking to turn a income after the construction of each new home in the home community. This builder will also need to ensure (hopefully) at a healthy cash flow during the construction process of each home, or throughout the entire process of development. There are a variety of factors that go into calculating a profit. As an example, we have a formula for profit that is P = R - C, which is the income (P) is equal to income (R) less the expense (C). While this formula is very simple, there are many variables that can be considered to this formula. For example for the formula under costs (C) is the presence of many variables to consider in the cost which can include the price of building materialsand costs of labor, holding expenses of real estate prior to purchase, utility costs as well as insurance premiums that are incurred during building. These are just a few among the numerous expenses that you can include in the above discussed formula. Under revenue (R) the formula can include variables such as the cost of selling the home, the cost of modifications or add-ons that are made to the home (security system or surround sound system granite countertops, etc). Simply plugging in these different variables in and of itself can be a daunting undertaking. However, this can become more complicated when the rate of change is not linear. It is necessary to adjust our calculations as the change rate of some or all of these variables follows the shape of the form of a curve (i.e. : the exponential rate of change)? This is an area where calculus plays a role.

Let's suppose that in the month of June we sold 50 homes , with an average selling cost of $500,000. Not taking other factors into account, our revenue (R) is the price ($500,000) multiplied by (50 houses that were sold) that's equal to $25,000,000. Consider that the total cost of building 50 homes was $23,500,000 https://canvas.instructure.com/eportfolios/688272/rafaelnnuq583/Watch_Out_How_Listings_Is_Taking_Over_And_What_To_Do_About_It therefore the profit (P) is 25,000,000 - $23,500,000 , which equals $1,500,000. With these numbers in mind your boss has requested you to maximize profits in the next month. What do you do? What price should you consider setting?

As a simple example of this, let's calculate the marginal profit in terms of x creating a home in the new community of residential. We can see that the revenue (R) will be equal to equation for demand (p) multiplied by the units that were sold (x). We write the equation as

The R value is px.

What if we decide that the demand equation for selling a home within this community

1,000,000 = $1,000,000 + 10/10.

If you invest $1,000,000, you are sure you'll not be able to sell any houses. The Cost equation (C) is

$300,000 + $18,000x ($175,000 in fixed material costs and $10,000 for each house sold, plus $125,000 of fixed cost of labor and $8,000 for each house).

We can then determine the marginal profit in terms of x (units sold). We then use this marginal profit to determine the amount we need to set to ensure maximum profits. The revenue, then, is

R = px = ($1,000,000 - the x/10) (x) (x) = $1,000,000x * x2/10.

Thus, the return is

P = R -C = ($1,000,000x - x2/10) * ($300,000 (plus $18,000x) = 982,000x - (x^2/10) 300,000.

We can then calculate the marginal profit by using the derivative of the profit.

dP/dx = 982,000 - (x/5)

To determine the maximum profit, we determine the marginal profit at zero, and then solve

982,000 - (x/5) = 0

x = 4910000.

We add x back into the demand function, and we get the following:

1,000,000 = $1,000,000 + (4910000)/10 equals $509,000.

The price we should set to gain the maximum amount of profit for each house we sell is $509,000. The next month you'll sell 50 additional homes using an updated pricing system and you earn a net profit by $450,000 over the prior month. Great job!

For the next month, your boss is asking you, the community developer, to figure out a way to cut costs on home construction. In the past, the cost-to-cost equation (C) used to be:

$300,000 + $18,000x ($175,000 in fixed material costs and $10,000 per house sold, plus $125,000 in fixed labor costs and $8,000 per house).

Afterclever negotiations with your building suppliers and building contractors, you were able to reduce the fixed material cost down to $150,000-$9,000 per house, and lower your labor expenses to $110,000 and $7,000 for a house. Because of this, your cost-to-cost calculation (C) has been changed to

C = $260,000 + $16,000x.

As a result of these changes you'll have to change the calculation of the base profit

P = R -C = ($1,000,000x (x2/10) - ($260,000 and $16,000x) = 984,000x (x^2/10) - - $260,000.

We can then determine the marginal profit of the new year by taking this derivative from the new profit calculated

dP/dx = 984,000 - (x/5).

To determine the maximum profit, set the marginal profit equal to zero and work out

984,000 - (x/5) = 0

5920000 =.

We plug x back in the demand function and receive the following results:

P = $1,000,000 - (4920000)/10 ($508,000).

Thus, the price we need to establish to increase the latest maximum profit on each house we sell should be $508,000. Now, even though we lower the price from $509,000 to $508,000 and we're still selling 50 units in the same way as the previous two months, our profit grown because we have reduced costs to the tune of $140,000. It is possible to determine this by calculating the differences of the original P = R C and the second P = C, which includes the new cost equation.

1stP = R C = ($1,000,000x - x^2/10) + ($300,000 plus $18,000x) = 982,000x (x^2/10) $300,000 - 48,799,750

2. 2nd P = - C = ($1,000,000x (x2/10) + ($260,000 plus $16,000x) = 984,000x - (x^2/10) + $260,000 = 48,939,750

After subtracting the second income from the initial profit, you'll discern a gap (increase) by $140,000 of profit. Thus, by cutting down cost of home construction you can increase the amount of profitable.

Let's recap. With the use of your demand function and marginal profit and maximum profit from calculus as well as other factors could you boost your company's income per month from an ABC Home Community project by hundreds of thousands of dollars. With a small amount of negotiation with your construction suppliers and labor leaders they were able to reduce your costs. And by a simple readjustment of the equation of cost (C) which you can quickly observe that, by cutting expenses, you increased profits further, even after increasing your profit maximum by reduction of $1000 per unit. This is one example of the amazing power math when used to solve real-world issues.

Personal property and property terms have been frequently misunderstood as to what they actually mean. This article will clear that down for you. We will explore the concepts of personal property, realty, land, real estate and, lastly, real property.

Let's begin by discussing personal property. Personal property, also known as chattel is all that's not property in real estate. For instance, couches, TVs and other items that are of this kind. Embellishments pronounced (M-blee-ments) are items such as fruits, apples, oranges, and fruit berries. Emlements also constitute personal property. Therefore, when you decide to sell your home flip, wholesale, or flip deal, you either sell or transfer ownership through an order of sale accompanied by personal property.

Realty.

"Real Estate" is the broad word used for real estate, land, and real estate.

Land

Land is everything nature gave to us like whats below the earth, above it and also the airspace. Also known as subsurface (underground) as well as subsurface (underground), surface (the dirt) and airspace. So when you purchase land , you'll get, keep in mind the fact that the government owns a good portion of our air space.

Real Estate

Real estate refers to the land and any man-made enhancements added to it. You know things like fences or driveways, homes, and even driveways. When you purchase real estate, this is what you'll likely get.

Real estate

Real property is real estate, land and what's known as a bundle of rights. The bundle of rights is comprised of five rights, the rights to possess, control the property, enjoy, exclude and then finally dispose. In essence, you are able to possess, take control, enjoy, exclude others, and then dispose of your property properties as you please so it is not in violation of violate federal or state laws.

Then there are two more types of properties we must include.

Fixture

Fixture is personal property that was attached to realty and is considered to be real property. It is therefore advisable to ask yourself upon selling to determine value "did you attach it to make it permanent?" The only exceptions are garage door openers and door keys, which are not considered fixtures.

Trade Fixtures

The fixtures that are traded are put in place by, for instance, a commercial tenant. These fixtures can also be the property of the commercial tenant.

I'm hoping this can clear some myths about personal property, real estate, land and real estate . And now, fixtures and trade fixtures!