Life cycle of a property- the period of time during which it exists as a physical object.

The life cycle of real estate acquired for commercial purposes, from the point of view of the owner of this real estate, can be repeated with the new owner of the same real estate until the end of the property’s life. The life cycle is constantly subject to certain patterns, according to G. Harrison - this is the physical, economic, chronological period and the remaining period of economic life.

On time physical life object refers to the time when it is possible to live or work in an existing building or structure. This indicator can be normative, calculated, actual, and can increase due to improved conditions or modernization. If a piece of real estate is demolished, its physical life ends.

On time economic life refer to the period during which an object can be used while receiving a profit; these improvements contribute to the value of the object. If the improvements made do not make a certain contribution to the value of the property due to the fact that it is outdated, then its economic life ends.

Under chronological age understand the period that has passed from the date the property was put into operation to the date of its assessment.

Life time

The effective age is based on assessing the appearance of a real estate property, its technical condition, and economic factors that influence the total cost of the property.

Effective age- this is the age corresponding to a certain physical state of the object and taking into account the possibility of its implementation.

The typical service life is called the standard service life.

Standard service life- this is the service life of buildings or structures, which is defined in regulations.

Under the remaining economic life buildings refer to the period from the date of its valuation until the end of its economic life. This period is used by an appraiser to estimate future income. The remaining economic life of an object is increased by its modernization or renovation.

All the stages of the life cycle and lifespan of real estate objects discussed above are interconnected. The owner of real estate, in order to implement adequate measures that will ensure an increase in the profitability of the property and its safety, must take into account the location of the real estate at a certain (any) stage of the life cycle.

Stages of the life cycle of a real estate property

Thus, real estate objects during their existence are subject to economic, physical, legal changes and go through the following stages of the life cycle:

• formation is construction, i.e. creation of a new enterprise, purchase or allocation of land;
• operation - includes operation and development, i.e. expansion, reorganization or reconstruction;
• cessation of existence is demolition, natural destruction or liquidation.

Stages of the life cycle of a real estate property:

1. Formation of the project concept and choice of option for using a free land plot. During this period, the choice of the best and most efficient use of the land is made. The choice of use case ends with the development of technical specifications for the design of improvements.

2. Designing improvements. At this stage - on the basis of the technical specifications for the design - the development of the project is carried out with the production of documentation necessary for obtaining permits and preparing the land plot, as well as laying communications, constructing buildings and planting new plantings.

3. Manufacturing (construction, construction) of improvements. During the implementation of the project by contractors, all physical characteristics of the object are almost completely changed, with these changes being recorded in inventory and cadastral documents.

4. Circulation (purchase and sale, donation, rental, etc.) with the transfer of property rights or with the appearance of an encumbrance on this right. At this stage, transactions with the property are carried out.

5. Use (consumption) of the object for its intended purpose with technical and operational maintenance. At this stage of the life cycle, the manager (or a professional management company) organizes the rational use by users of the consumer potential of the object.

6. Modernization: major repairs, reconstruction, restoration of improvements with possible repurposing (change of functional purpose) of the object. This stage begins at the moment when the object in its current state can no longer satisfy the modern needs of users and/or if its operation becomes economically ineffective. At this stage, at a minimum, a major overhaul is carried out without changing the planning solution and functional purpose, but with the elimination of removable physical wear and tear and functional obsolescence.

7. Disposal, demolition of improvements, landfill or recycling of materials. The life cycle ends with the demolition of improvements at the end of their economic life. The management company is preparing proposals for setting deadlines and an economically feasible method for demolition of buildings, taking into account the possibility of selling structural elements and materials of liquidated buildings and communications.

Assessing the operating efficiency of any real estate asset (constructed or renovated) involves considering it throughout its entire life cycle. The sequence of the real estate process from conception to liquidation (disposal). The life cycle of an object from the moment of feasibility study to the moment of physical or moral aging can be divided into 4 stages:

I. Pre-design and design stages.

1. Rational construction of cost calculations for the entire life cycle.

2. Minimization of operating costs.

The first stage largely determines the efficiency of an object’s functioning. This stage is especially complex and consists of several components.

Pre-design stage - concept stage. It includes:

· analysis of the real estate market;

· selection and approval of the location of the object;

· development of feasibility study;

· attraction of investment funds.

Result: design assignment.

The design stage includes (Article 48 Grad.K):

· engineering survey;

· architectural and construction design;

· examination;

· registration of initial permitting documentation.

II. Construction of a real estate project.

1. Customer's choice. Project management (it is advisable to start from the first period).

2. Compliance of the capital construction project under construction with the requirements of the real estate market.

3. Selection of a contractor (general contract, subcontract).

4. Construction control.

5. State construction supervision.

6. Issuance of permission to put the facility into operation.

At this stage, real evidence appears of the compliance of the object under construction with the requirements of the real estate market segment, determined by the logic of the life cycle.

III. Operation of the property.

Includes functional and technical operation.

Functional (extracting functional utility in accordance with the design functional purpose and goals of the owner or investor) includes:

· possession and use;

· making a profit, satisfying a need;

· disposal of property;

· change of owners, co-owners, users (with mandatory registration of rights and transactions).

Technical (maintaining the technical condition of real estate, which provides conditions for extracting functional utility at a given level) operation:

· property management (maintenance, repair, replacement);

· changing the functional purpose of the object and its parts;

· repetition or modification of the life cycle;

· end of the economic life of the object.

Operation of real estate objects:

Operation of premises equipment;

Material accounting;

Fire protection, safety precautions;

Communications management (for public buildings);

Recycling, waste processing;

Elimination of emergency situations;

Maintenance and repair.

Operating periods:

A. Operation until full payback;

B. Subsequent operating time for the investment (until the additional costs of eliminating wear and tear do not exceed the benefits of operation)

IV. The stage of closing the object.

This is the complete elimination of its original and acquired functions, resulting in either demolition or a qualitatively new development. This stage requires significant costs for:

Liquidation

Changing an object

Elimination of physical obsolescence.

The value of a piece of land as a vacant one is greater than the value of the land plus the value of the existing facility.

The economic rationale for eliminating improvements is to remove obstacles in the form of existing improvements to more efficient use of the land.

The life cycle of real estate is subject to certain patterns and includes economic, physical, chronological and remaining economic life.

Physical lifespan of an object- the period of actual existence of the property in a functionally suitable condition before its demolition. It happens: normative, actual, calculated.

Economic life span- the period of time during which the object is used as a source of profit.

The lifetime of an object is the period of time during which the object can be used for its functional purpose.

Life periods:

chronological age- period of operation of the facility from the moment of its commissioning;

effective age- age of the object, based on an assessment of its appearance and technical condition;

remaining economic life- the period from the date of valuation until the end of its economic life.

Any real estate object is a tangible asset that exists in time, so its life cycle can be specified. The life cycle of a property (physical) is the period of time during which the property exists as a physical object. The life cycle of a real estate property consists of the following stages (phases):

1. Formation of the project concept and choice of option for using a free land plot. During this period, the choice of the best and most efficient use of the land plot is made - taking into account the peculiarities of its characteristics and all the properties of the environment. Based on the analysis, the most productive use option is selected from those that are legally permitted, physically feasible, economically feasible and financially feasible. The choice of use case ends with the development of technical specifications for the design of improvements.

2. Designing improvements. At this stage - on the basis of the design specifications - the development of the project is carried out (by a specialized organization) with the production of documentation necessary for obtaining permits and preparing the land plot (fixing the shape and size, removing unnecessary natural and artificial vegetation, draining reservoirs) , as well as laying communications, constructing buildings (structures) and planting new plantings. It is advisable to carry out acceptance of the project from the design organization with the participation of the management company that participated in the development of the technical specifications for the design.

3. Manufacturing (construction, construction) of improvements. During the implementation of the project by contractors, all physical characteristics of the object are almost completely changed, with these changes being recorded in inventory and cadastral documents. During the construction of improvements and as a result of consolidation of the new status of the object, as a rule, the characteristics of the environment related to the created object also change.

4. Treatment (purchase and sale, donation, lease, etc.) with the transfer of property rights or with the appearance of an encumbrance on this right. At this stage, operations are carried out with the object and the change in the legal fate of the latter is registered by the state. When buying or selling an object, the subject of ownership changes. When the land and/or improvements are leased or hired by the owner (or, on behalf of the owner, by the management company), the rights of use (and, possibly, ownership) are transferred to another entity with the appearance of an encumbrance on the ownership right.

5. Use (consumption) of the object for its intended purpose with technical and operational maintenance. At this stage of the life cycle, the manager (or a professional management company) organizes the rational use by users of the consumer potential of the object. Over time, the characteristics of the object undergo changes, because improvements physically wear out and become functionally obsolete, which is aggravated by changes in the situation in the economy and in the external physical environment, leading to additional, so-called external obsolescence.

During operation, technical inspection and routine repairs of individual improvement elements are periodically carried out without stopping the use of the facility as a whole.

6. Modernization: major repairs, reconstruction, restoration of improvements with possible repurposing (change of functional purpose) of the object. This stage begins at the moment when the object in its current state can no longer satisfy the modern needs of users and/or if its operation becomes economically ineffective. At this stage, at a minimum, a major overhaul is carried out without changing the planning solution and functional purpose, but with the elimination of removable physical wear and tear and functional obsolescence.

If the analysis of the best and most efficient use of land and improvements, carried out at this moment, shows the advisability of partially changing the functional purpose of the improvements, then the latter will be reconstructed with a change in the layout of part of the premises. Naturally, at the same time, the functions of major repairs of improvement elements are provided, preserving the original functional purpose.

If an analysis of the use of an object in its existing state shows the need to completely replace its functional purpose, then reconstruction may be accompanied not only by a radical change in the layout, but also by an extension or superstructure of existing buildings and the development of a free part of the land plot.

7. Disposal, demolition of improvements, landfill or recycling of materials. The life cycle ends with the demolition of improvements at the end of their economic life. The management company is preparing proposals for setting deadlines and an economically feasible method for demolition of buildings, taking into account the possibility of selling structural elements and materials of liquidated buildings and communications (the volume of liquidation costs is minimized).

Some stages during the life cycle of a property may be repeated. So, for example, the idea of ​​a project to create a new facility can arise both at the stage when a plot of land is completely free, and at the stage when the need arises for reconstruction, partial demolition or completion of buildings. The circulation phase can be realized several times during the life of an object, and the moments of circulation determine the time boundaries of the periods that form the basis of the so-called investment cycles.

A property, being a tangible asset, can be used as an economic good, a commodity or a source of income. If a property brings income to its owner and satisfies his needs, then it is exploited by the user in order to increase income and profit. As soon as an object of assessment does not generate income, it loses its usefulness for the owner and is subject to sale and can be sold as a product in whole or in parts at any stage of the life cycle.

The main stages of the life cycle of a real estate property as a product:

1. Acquisition of real estate (purchase, construction, inheritance).

2. Possession and use during a certain period

3. Property management

4. Making a profit, satisfying the needs of the owners

5. Disposal of property

6. Change of owners, owners, users

7. Disposal of property rights to an object

8. Change of functionality

9. Termination of ownership

Cash flows at the stages of the real estate investment cycle are characterized by the opposite direction and unevenness. At the initial stage they have negative cash flows (during construction or purchase). During the period of its use (renting), negative cash flows are transformed into positive ones, and the owner already receives stable income, although at the same time there may also be costs (for repairs and maintenance of the building)

Unlike other products, income-producing real estate requires professional asset management, starting with the search for the best and most effective use case and its practical implementation.

State educational institution of higher professional education

St. Petersburg Trade and Economic Institute

In the discipline "Real Estate Economics"

“Features and life cycle of a real estate property”

Completed by: Andreyanova E.V.

Gr. 1410, Faculty of Economics, 4th year

Scientific director

Pirogova O.E.

St. Petersburg, 2010

Introduction

Chapter 1. The concept of real estate and its object

1 Definition of real estate

2 Real estate object

Chapter 2. Features and life cycle of a real estate property

1 Features of the property

2 Life cycle of real estate as a physical object

3 Life cycle of real estate as an economic object

4 Life cycle of an enterprise’s real estate as a property complex

Conclusion

Bibliography

Applications

Introduction

Real estate objects occupy a special place in the system of public relations, since economic activities and priority relations of people in all spheres of their activity are directly or indirectly connected with them.

Today, it is real estate that appears to be the central link in the country’s market economy system. And this is understandable - a piece of real estate is not only a special product, but at the same time it is also capital that generates income and the basis for the provision of services in order to conduct effective business activities.

Real estate economics is a system of relationships that arise in the process of real estate transactions.

Knowledge of the discipline is necessary in the training of modern specialists, since any professional is currently faced in practical activities with the processes occurring in the real estate market.

The main goal of the guidelines is for students to master knowledge about the essence of real estate, legal aspects of the economics of real estate, basic operations and approaches to the valuation of real estate, features of the real estate market and types of business activities on it.

1. The concept of real estate and its object

1 Definition of real estate

The concept of “real estate” is inseparable from another concept – “property”.

Property is a collection of property, i.e. subject to monetary valuation, legal relations in which this person (individual or legal) is located.

Property owned by any individual or legal entity is divided by content into:

· asset: a set of things owned by a person by right of ownership or by virtue of another property right; a set of rights to the actions of others (for example, debt property);

· passive: a set of things that belong to other persons, but are temporarily in the possession of a given person; the totality of obligations incumbent on a given person.

Historically, since the times of Roman law, property has been divided into movable and immovable.

According to Art. 130 of the Civil Code of the Russian Federation (hereinafter referred to as the Civil Code of the Russian Federation) “immovable things (real estate, real estate) include land plots, subsoil plots, isolated water bodies and everything that is firmly connected to the land, that is, objects the movement of which without disproportionate damage to their purpose impossible, including forests, perennial plantings, buildings, structures.

Immovable property also includes aircraft and sea vessels, inland navigation vessels, and space objects subject to state registration. The law may classify other property as immovable property.”

Modern Russian legal practice has established a number of criteria by which a physical object can be classified as real estate:

· strong connection with a specific land plot (impossibility of moving an object without disproportionate damage to its purpose);

· completeness in terms of the possibility of being used for its intended purpose;

· certified (officially registered) belonging to a specific owner - the state, a subject of the Federation, a municipality, a private individual or a group of private individuals;

· the possibility of physical isolation of the real estate object and the real estate (i.e. the presence of clearly established physical boundaries of the real estate object);

· functional independence of the real estate object (can this real estate object be used separately from other objects, or does its functional purpose involve partial use of other real estate objects);

· presence (or absence) of easements and other restrictions on use rights.

Items not related to real estate, including money and securities, are recognized as movable property. Registration of rights to movable property is not required, except in cases specified by law.

2 Real estate object

“Real estate” contains two bases - physical and legal. The physical basis of this concept is based on the material component of real estate, namely: buildings, structures, land plots, subsoil, etc. Anything that “is an object that is connected to the earth in such a way that its movement without disproportionate damage to its purpose is impossible.”

The legal part lies in the area of ​​exercising rights arising from transactions with real estate and its use.

Due to wear and tear, the property loses its liquidity - “the possibility of implementing any method of converting real estate into money” - this is the legal component of the concept.
Each property has its own cadastral number, and a process called “real estate inventory” is applied to it. It is characterized by “inventory” - the history of the emergence and changes of a real estate object. All of the above relates to the legal part of the definition of real estate.

Objects of civil rights include things, including money and securities, other property, including property rights; works and services; information; results of intellectual activity, including exclusive rights to them (intellectual property); intangible benefits.

2. Features and life cycle of the property

1 Features of the property

Having a land plot as a component, all artificial buildings (real estate objects) have generic characteristics that allow them to be distinguished from movable objects. This:

Stationarity, immobility. The sign is characterized by a strong physical connection of the property with the earth's surface and the impossibility of its movement in space without physical destruction and damage, which makes it unsuitable for further use.

Materiality. It should be noted that real estate always operates in physical and value forms. The physical characteristics of a property include, for example, its size and shape, nuisances and hazards, the environment, access roads, utilities, surface and subsoil, landscaping, etc. The totality of these characteristics determines the utility of the property, which forms the basis of real estate value. However, it does not in itself determine the value. Any object has value, having to one degree or another such characteristics as suitability and limited supply. Limited supply must be present to create significant value. Social ideals and standards, economic activities and trends, laws, government decisions and actions, and natural forces influence human behavior, and all of these interact with each other to create, maintain, change, or decrease the value of real estate. It should also be noted here that real estate is one of the few goods whose value is not only almost always stable, but also tends to gradually increase over time.

The durability of real estate is practically higher than the durability of all other goods, except for certain types of precious stones and products made of rare metals.

For example, according to the building codes and regulations (SNiP) in force in Russia, residential projects, depending on the material of the main structures (foundation, walls, ceilings), are divided into 6 groups with standard service lives from 15 to 150 years.

The duration of the earth's circulation, if used correctly, is infinite, and violation of its correct use will lead to irreparable losses.

In addition to the main generic characteristics of real estate, it is possible to distinguish private characteristics that are determined by specific indicators depending on the type of real estate.

It is almost impossible to talk about two identical apartments, two identical plots, two identical buildings, since they will necessarily have differences in location in relation to other real estate objects, to infrastructure and even to cardinal points, which shows heterogeneity, uniqueness and the uniqueness of each property.

Real estate has increased economic value. This is due to the fact that it is intended for long-term use and is not consumed during use. As a rule, it has a structural complexity that requires high costs to maintain in proper condition.

In addition, a property always has its own functional purpose. It can be productive or non-productive. For production purposes, the property directly or indirectly participates in the creation of products, performance of work, and provision of services. For non-production purposes, it provides conditions for living and serving people.

Real estate always acts as an object of long-term investment. Most often, this is due to the fact that purchasing a property in parts is not possible, since investing capital in a property requires a significant amount of capital. In addition, if we talk about the profitable side of the matter, cash investments in real estate represent expenses with a fairly high payback period.

It should be noted that some types of real estate can be converted into movable property. For example, forests and perennial plantings, by definition, belong to real estate, and harvested timber is already movable property.

Please note that equipment located in buildings and structures (heating, water supply, sewerage, electrical equipment, elevators, grilles, second metal doors, etc.) is classified as movable property. But since it has become an integral part of the real estate, in the case of a transaction on this object, all movable property included in the real estate should be described in detail (this is especially true for property that is subject to seizure during the transaction).

Often, real estate transactions may transfer a set of rights and interests that are not part of the real estate. These may be lease rights, preemptive rights, or other interests (easements).

So, real estate includes the most valuable and generally significant objects of fixed assets, and real estate objects such as land and subsoil have great not only economic, but also strategic significance for any state at all times.

For example, in the pre-capitalist period, land was the only significant source of wealth for each individual, as well as for the state and society as a whole.

Real estate in any social system is an object of economic and state interests, and therefore, for this category of property, the mandatory state registration of rights to it has been introduced, which makes it possible to identify the object and subject of law, since the connection between the property and the subject of rights to it is invisible, and the transfer of real estate by physical movement is impossible.

2 Life cycle of real estate as a physical object

Acting as a physical object, real estate is a product, an object of property, business, and goes through various stages and processes in each of its incarnations.

The life cycle of a real estate object (physical) is the period of time during which real estate exists as a physical object. The life cycle of a real estate property consists of the following stages (phases):

Formation of the project concept and choice of option for using the free land plot. During this period, the choice of the best and most efficient use of the land plot is made - taking into account the peculiarities of its characteristics and all the properties of the environment. Based on the analysis, the most productive use option is selected from those that are legally permitted, physically feasible, economically feasible and financially feasible. The choice of use case ends with the development of technical specifications for the design of improvements.

Designing improvements. At this stage - on the basis of the design specifications - the development of the project is carried out (by a specialized organization) with the production of documentation necessary for obtaining permits and preparing the land plot (fixing the shape and size, removing unnecessary natural and artificial vegetation, draining reservoirs) , as well as laying communications, constructing buildings (structures) and planting new plantings. It is advisable to carry out acceptance of the project from the design organization with the participation of the management company that participated in the development of the technical specifications for the design.

Manufacturing (construction, construction) of improvements. During the implementation of the project by contractors, all physical characteristics of the object are almost completely changed, with these changes being recorded in inventory and cadastral documents. During the construction of improvements and as a result of consolidation of the new status of the object, as a rule, the characteristics of the environment related to the created object also change.

Treatment (purchase and sale, donation, lease, etc.) with the transfer of property rights or with the appearance of an encumbrance on this right. At this stage, operations are carried out with the object and the change in the legal fate of the latter is registered by the state. When buying or selling an object, the subject of ownership changes. When the land and/or improvements are leased or hired by the owner (or, on behalf of the owner, by the management company), the rights of use (and, possibly, ownership) are transferred to another entity with the appearance of an encumbrance on the ownership right.

Use (consumption) of the object for its intended purpose with technical and operational maintenance. At this stage of the life cycle, the manager (or a professional management company) organizes the rational use by users of the consumer potential of the object. Over time, the characteristics of the object undergo changes, because improvements physically wear out and become functionally obsolete, which is aggravated by changes in the situation in the economy and in the external physical environment, leading to additional, so-called external obsolescence.

During operation, technical inspection and routine repairs of individual improvement elements are periodically carried out without stopping the use of the facility as a whole.

Modernization: major repairs, reconstruction, restoration of improvements with possible repurposing (change of functional purpose) of the object. This stage begins at the moment when the object in its current state can no longer satisfy the modern needs of users and/or if its operation becomes economically ineffective. At this stage, at a minimum, a major overhaul is carried out without changing the planning solution and functional purpose, but with the elimination of removable physical wear and tear and functional obsolescence.

If the analysis of the best and most efficient use of land and improvements, carried out at this moment, shows the advisability of partially changing the functional purpose of the improvements, then the latter will be reconstructed with a change in the layout of part of the premises. Naturally, at the same time, the functions of major repairs of improvement elements are provided, preserving the original functional purpose.

If an analysis of the use of an object in its existing state shows the need to completely replace its functional purpose, then reconstruction may be accompanied not only by a radical change in the layout, but also by an extension or superstructure of existing buildings and the development of a free part of the land plot.

Disposal, demolition of improvements, landfill or recycling of materials. The life cycle ends with the demolition of improvements at the end of their economic life. The management company is preparing proposals for setting deadlines and an economically feasible method for demolition of buildings, taking into account the possibility of selling structural elements and materials of liquidated buildings and communications (the volume of liquidation costs is minimized).

Obviously, some phases are repeated at different stages of the life cycle. So, for example, the idea of ​​a project to create a new facility can arise both at the stage when a plot of land is completely free, and at the stage when the need arises for reconstruction, partial demolition or completion of buildings. The circulation phase can be realized several times during the life of an object, and the moments of circulation determine the time boundaries of the periods that form the basis of the so-called investment cycles.

3 Life cycle of real estate as an economic object

object real estate property economic

The life cycle of a real estate property is subject to certain patterns and includes the period of economic and physical life

Economic life, which determines the period of time during which an object can be used as a source of profit. The economic life ends when the improvements made no longer contribute to the value of the property.

A typical physical life span is the period of actual existence of a property in a functionally suitable condition before its demolition. Determined by regulatory documents. The physical and economic lifespan of real estate objects are objective in nature, which can be regulated, but cannot be canceled.

Lifetime is the period of time when an object exists and you can live or work in it.

From the point of view of the life period of a real estate property, the following periods are distinguished:

ü Effective age, reflecting the age of an object depending on its appearance and technical condition.

ü Chronological (actual) age corresponding to the period the object has been in operation since its commissioning.

ü The remaining economic life, used for the purpose of assessing an object by an expert appraiser and constituting the period from the date of assessment to the end of the economic life of the object.

The life cycle of real estate as an economic object is as follows:

Creation

State registration of real estate - in the Russian Federation - a legal act of recognition and confirmation by the state of the emergence, limitation (encumbrance), transfer or termination of rights to real estate in accordance with the Civil Code of the Russian Federation.

Possession and use; change of owners. Possession - in civil law - the authority of the owner; actual possession of a thing, creating for the owner the possibility of direct influence on the thing.

Development

Deterioration of consumer properties of real estate

End of economic life

4 Life cycle of an enterprise’s real estate as a property complex

An enterprise as an object of rights is recognized as a property complex used to carry out business activities.

The enterprise as a whole as a property complex is recognized as real estate.

An enterprise as a whole or part of it may be the object of purchase and sale, pledge, lease and other transactions related to the establishment, modification and termination of property rights.

The composition of an enterprise as a property complex includes all types of property intended for its activities, including land plots, buildings, structures, equipment, inventory, raw materials, products, rights of claim, debts, as well as rights to designations that individualize the enterprise, its products, and work and services (trade name, trademarks, service marks), and other exclusive rights, unless otherwise provided by law or contract.

Life cycle of an enterprise as a property complex:

Creation or privatization of an enterprise

State registration of property rights (state, municipal, private, shared ownership). State registration of rights to an enterprise and transactions with it must be carried out in a special manner, determined by the legal specifics of this object. The main feature of the enterprise is the possibility of including land plots and other real estate located in different territories, as well as the possibility of excluding real estate from the enterprise.

Becoming or reaching design capacity

Optimal performance

Change of ownership, private and complete

Reorganization, reform, reconstruction, merger, acquisition

Bankruptcy (optional stage)

Liquidation (optional stage). Liquidation of a property complex is auctions and other mechanisms for the sale of property (including real estate) of a bankrupt organization in accordance with the legal provisions of bankruptcy proceedings.

Termination of functioning: natural non-restorative cessation, physical destruction, deliberate demolition.

Conclusion

In any social system, real estate occupies a special place in the system of social relations, with the functioning of which the life and activities of people in all spheres of business, management and organization are in one way or another connected. It is real estate that forms the central link of the entire system of market relations. Real estate is not only the most important product that satisfies various needs of people, but at the same time it is also capital in real form that generates income.

Real estate is the basis of the country's national wealth, having a massive nature in terms of the number of owners. Therefore, knowledge of the economics of real estate is necessary for successful entrepreneurial activity in various types of business, as well as in the life of any family and individual citizens, since ownership of real estate is the primary basis for the freedom, independence and dignified existence of all people.

Bibliography

1. “Real Estate Economics.” Textbook. Goremykin V. A., Moscow, 2008.

. "Real Estate Economics." Tutorial. Asaul A.N. Karasev A.V., Moscow, 2009.

Ozerov E. S. Economics and real estate management. St. Petersburg: Publishing house "ISS", 2006 - 422 p. - ISBN 5-901-810-04-Х

Ignatov L. L. Economics of real estate. Educational and methodological manual. - M.: Publishing house of MSTU im. N. E. Bauman, 2008. - 168 p. - ISBN 5-7038-2174-6

The life cycle of a real estate object as a physical object is the sequence of processes of the existence of a real estate object from conception to liquidation (disposal). The life cycle of material objects consists of the following stages: conception - birth - maturity - aging - death.

The stages of the life cycle of a real estate property are called differently: pre-project - design - construction - operation - closure.

• 1. The pre-project (initial) stage includes an analysis of the real estate market, selection of a property, formation of a project strategy, investment analysis, preparation of initial permitting documentation, and attraction of credit investment funds.
• 2. The design stage includes the development of a financial scheme, the organization of financing, the selection of an architectural and engineering team, and design management.

The main tasks of this period are to reduce the duration of stages, improve the consumer qualities of real estate objects and, most importantly, minimize operating costs at all stages of the life cycle.

Obviously, in the first two stages no profit is generated, since they are of a motivational nature.

• 3. The construction stage consists of selecting a contractor, coordinating construction work and monitoring the quality of construction, cost estimates and expenses. At this stage, real evidence appears of the compliance of the object under construction with the requirements of the real estate market segment, determined by the logic of the life cycle. During this period, the tasks of increasing the share of investments of potential consumers are solved, since the growth in the volume of offers and profits indicates fairly wide market recognition.
• 4. The operation stage of the property involves the maintenance and repair of facilities and their reconstruction. Operation of real estate includes: operation and repair of equipment and premises, material accounting, fire protection and safety precautions, communications management, waste disposal and recycling, changes and reconstruction, emergency response and facility security.

Reconstruction of real estate objects is a radical reconstruction, alteration in order to improve the complex of organizational and technical measures aimed at eliminating the moral and physical deterioration of real estate objects as a whole or their individual elements and systems.

Maintenance - work performed to ensure the standard service life of real estate; they do not lead to an increase in its cost, but prevent deterioration and failure of individual elements. The purpose of maintenance is to ensure that the facility is used for its intended purpose.

Repair - work to eliminate damage (deterioration) of a property in order to restore its normal operating condition. Repair work is divided into small and large. Minor repairs lasting 1-2 days do not extend the service life of the object and do not increase its value. Major repairs (more than 2 days) extend the life of the property, but do not increase its value.

Replacement is the process of replacing unusable or obsolete components of fixed assets included in a property with a similar unit.

5. The stage of closure of an object is the complete elimination of its original and acquired functions, the result is either demolition or a qualitatively new development. At this stage, there are significant liquidation costs that result from owning the property. If a property receives a new high-quality development, the cost of change refers to the cost of ownership per new function.

Similar to the life cycle of real estate objects, the life cycle of a property complex can be divided into stages:

• 1. Formation of a property complex (regulatory registration of the results of transactions with real estate objects and rights to them: purchase and sale, contribution to the authorized capital, rent, leasing).
• 2. Development of the property complex (new construction, addition to the balance sheet).
• 3. Liquidation of a property complex - auctions and other mechanisms for the sale of property (including real estate) of a bankrupt organization in accordance with the legal provisions of bankruptcy proceedings.

The life cycle of real estate objects as property from the point of view of the owner is repeated many times, with each new owner, until the end of the economic or physical life of the object. Based on the trinity of categories - material (physical), legal (legal) and economic - the life cycle of a real estate property can be divided into three stages (Fig. 1.). Each stage includes certain activities and actions of the owner.

Rice. 1.

The life cycle of a real estate property is subject to certain patterns and includes the period of economic and physical life (Fig. 2):

• 1. The economic life determines the period of time during which an asset can be used as a source of profit and ends when improvements made no longer contribute to the value of the asset.
• 2. A typical period of physical life is the period of actual existence of a real estate property in a functionally suitable condition before its demolition. Determined by regulatory documents.

The physical and economic lifespan of real estate objects are objective in nature, which can be regulated, but cannot be canceled.

3. Lifetime - the period of time when an object exists and you can live or work in it.

Rice. 2.

From the point of view of the life period of a real estate property, the following periods are distinguished:

• 1. Effective age, reflecting the age of an object depending on its appearance and technical condition.
• 2. Chronological (actual) age corresponding to the period of the object being in operation from the moment of its commissioning.
• 3. The remaining economic life period used to evaluate the object by an expert appraiser and constituting the period from the date of evaluation to the end of the economic life of the object.