Lesson 2: “Real Property: Can I Touch your Shingles?
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Intro Script:
Alright future real estate moguls, in this video we’re going to discuss real
property by breaking down its physical and economic quirks—because let’s
be real not a lot of people can describe what is real property and if you don’t
know what it is – how can you ever maximize its value? So let’s get started
Physical Traits: The Triforce (that’s a Legend of Zelda reference for my
fellow video gamers)
1. Immobile: Land doesn’t care about your ✨aesthetic✨. You can’t drag it
to a better zip code. It’s like a bad tattoo—permanent and judging you.
2. Indestructible: You can bulldoze a house, but the land? It’ll outlive us
all. Try nuking it—congrats, you’ve made a dirt parking lot for
cockroaches and earthworms.
3. Non-Homogenous: No two parcels are alike. Your lot’s got ‘mountain
views’; while your neighbor’s are next to a meth lab. You’ll probably
hear the saying location, location, location often with real estate
agents.
Economic Traits: Why Real Property is a Moody Asset
Scarcity: You can’t print land like you can with NFTs. Land is a finite
supply which equals = value. That ‘meh’ corner lot that you pass by on
your way to pick up McDonalds? Priceless if a Trader Joe’s moves in or
an Erewhon. Look that grocery store up, you’ll be buying a loaf of
bread for $50.
Situs (Fancy word for a Property’s Location): The immoveable location
is an economic trait itself. A building on Main Street is worth more than
an identically built twin that’s behind a Denny’s. Like Instagram
followers—visibility matters, aside from just plastic surgery.
Modifications: You can’t reproduce new land somewhere, but you can
modify what’s on it. Build a skyscraper? Cha-ching. Build a shed?
Eeehhh. But bigger isn’t always better… at least that’s what girlfriend
told me…
Liquidity: Selling land is slower than dial-up internet. Slower than
processing paperwork at your local DMV. It’s a frozen and lumpy asset.
It’s not liquid like stocks and it takes time to fully cash in from real
estate.
Law of Situs: Land laws are as consistent as TikTok trends. Texas lets
you shoot fireworks; California will tax your oxygen. But even deeper
than the state level, different cities and counties may have different
regulations. These laws impact the economic traits of your land simply
because of where its located.
Incorporeal Rights: The Sneaky Ghosts of Real Estate 👻
These are the unseen powers that you own with real property. In other words,
you can’t physically possess it, it’s intangible, but it can be legally owned
and transferred. Some examples are:
Easements: Which grants the right for, let’s say, your neighbor, to use
your driveway to get to the main road.
Air Rights: Which means that you own the sky above your land…
unless you sold it to your neighbor and now, they can fly a drone
overhead and accidently film your questionable tan lines.
Mineral Rights: Is another incorporeal right. You can dig for oil! Or
dinosaur bones.
Incorporeal rights are important for real estate because they also have a
significant impact on the value and use of real estate.
So in this video we covered the physical and economic traits of real property,
which are things like its location, its immobility and scarcity. Part of real
property also includes the intangible or incorporeal rights which we also
quickly covered.
In the next video we’re going to now cover Personal Property and difference
between the two. You’ll find out why real estate is sometimes the ultimate
‘What’s Yours vs. What’s Mine’ Showdown.