Public Restrictions on Ownership (9/13/12)

With real estate being such a large part of our economy, it is no surprise that the government has its hand involved. Just as there are private restrictions, the government created public restrictions that limit the ownership of real estate. The government exerts its power through Eminent Domain, taxation, escheat and police power. The most common and familiar restriction on real estate is the power to tax. This most directly affects owners because it is a large expense every year that puts a dent in peoples' wallets. Every year owners must pay a rather significant tax on their property based on a government assessed value of the real estate. Although it is a dreaded bill to pay, it does provide many benefits that we just take for granted as noted in the following article : Property Tax Benefits. Among many other luxuries, this tax covers school funding, fire and ambulance services, trash pickup and public libraries. In addition to the benefits it provides, it also is a very predictable expense with high transparency of the allocated funds on the local taxing authority's website. Although it is a high expense, it is a fair price to pay to receive the services that we expect from where we reside. This restriction limits where we live and the type of property we own because not paying this tax is all but impossible to escape. It boils down to a simple rule: you don't pay your taxes, you lose your house in a public auction. Another power, which is much more controversial, that is used as our country becomes more developed is Eminent Domain. This allows for the government to acquire private property for public use providing just compensation. This is controversial because it is not clear cut whether the reason for taking the property is really beneficial to the citizens and how can just compensation be measured? This power is a necessary provision that our government must hold to allow our nation to prosper, but you have to feel sorry for those affected. It is a large issue that I believe needs to be strictly monitored with due process in every step of proceeding forward with its use. We need the government to regulate our real estate dealings because without the power of regulation, health, safety, morals and general welfare will be at great jeopardy.

Private Restrictions on Ownership (9/13/12)

Although it may seem like once you own a piece of land you can do whatever you want on it or with it, that is far from the truth. There are restrictions on how a landowner may use a property from a nongovernmental authority in the way of:

• Easements
• Liens
• C,C,&R's

A classic example is a deed restriction written by a developer of a neighborhood to promote the betterment of the development. These can range from colors you may paint your house, to landscaping, to the style of mailbox you must have. In the following example, it lists certain materials that must be used on a garage, how a building must be used, and required distances from roads. The list could literally be infinite of what could be on a deed restriction because it really depends on the lifestyle desired and the location of a development.

 The actual language of a private restriction seems relatively loose in diction and style but that helps the average person understand what it means rather than having dense language that can't be readily deciphered. Despite these rules coming from a private source, they are fully enforceable in the courts and help maintain a lifestyle and property value within a community. I do not explicitly know the private restrictions in the two communities I call home, but for most residents of a neighborhood, like myself, it is pretty clear when something is in violation. These private restrictions are in place so everybody can enjoy their real estate for its intended purpose, so when somebody steps out of line, neighbors take notice and demand repair or change. Here is an example of a resident taping his neighbor's violation either for evidence or public humiliation online.

This a pretty funny example of a private restriction violation, but it goes to show that these are real restrictions that affect how you can use your property and what you can expect of others.

Property Rights and Legal Descriptions (9/12/12)

Property rights are the ability exploit the different aspects of a property. These rights can be surface rights, water rights, mineral rights, and air rights which all allow for diferent uses. Since I lease hunting land south of Batesville and know many Texas ranch owners, I've seen how the mineral rights to land affect people and their ties to the land. The Eagle Ford Shale has brought much wealth to many many families, but in other cases leaves properties open to exploitation from all the machinery and waste. The video above is a marketing pitch for people to sell their lucrative mineral rights to property in the area. For me this has been the most dramatic exposure to property rights as I've witnessed people with relatively small fortunes become grossly wealthy overnight. With all of the money involved you must be cautious with what you do with land and the rights that are associated.

 Although I've elaborated on just the mineral rights, all of these rights must have boundaries and limitations to where they extend. These rights are bound by a legal description of the real estate in the deed. There are various methods of legal descriptions that are described in detail in the following link: Legal Descriptions . It is just an informational link but in my opionion it is vital knowledge to have or at the least have a general idea of what is going on if your involved in real estate at all. For the most part, real estate is going to be the most expensive puchase a person makes in their life, so it makes sense to know what your buying when making such a large investment. How do you know what your legally buying? The Legal Description tells you everything, don't depend on a fence or what you see on a site visit to confirm what is yours.

The Importance of Real Estate (9/11/12)

Real estate has become such a large part of our economy that now the U.S. economy is extremely DEPENDENT on flourishing real estate. In times of economic hardship, as we have recently seen, the government looks to real estate in many ways to get our economy back on track and raise it out of decline. The following video makes a plead for people to buy or sell a house as our economy depends on it. Another interesting claim was the 2.9 direct jobs that could be created in the industry from builders to real estate agents. I believe this to be a serious issue that people and the government need to consider...home ownership and the real estate sector are a backbone of our economy.I truly believe that real estate and economies of developed nations go hand in hand.

I know that right now I do not want my money tied up in corporations listed on the stock market. I'm tired of watching the daily up and downs and wondering when is the right moment to make plays just to not lose money. I have a basic understanding of the numbers and what is happening, but at the end of the day, your just watching numbers. Not everybody can understand whats going on in the stock market, but starting with just a small rental property can make sense more easily to people and give the investor something tangible. This is great news for individuals because it provides and relatively safe, straightforward investment or on the opposite end of the sprectrum, somewhere to live without tying up much money. Here is an article on the reasons why now is a great time to invest in rental properties. Everything is teed up to make this a great investment right now. Low prices, low interest rates, increasing demand for real estate...how could this not win with a little bit of thought?

http://realestate.msn.com/article.aspx?cp-documentid=23972039

About Andrew

My name is Andrew Michael Bagnall and I am a senior at Texas A&M University. I am currently working towards earning a Finance undergraduate degree and expect to graduate in 2013. San Antonio is my hometown, which is great cause it offers me the opportunity to pursue my hobbies of hunting, fishing, golfing, and football. I plan on attending law school after graduation and want to pursue a career in law focusing on business/corporate, real estate, or oil/gas law.