1. Real Estate Principles for the New Economy by Miller/Geltner
2. Real Estate Finance and Investments by Brueggeman/Fisher
3. The Appraisal of Real Estate by the Appraisal Institute
4.Investment Analysis for Real Estate Decisions by Greer/Farrell
6. Macroeconomics by N. Gregory Mankiw
Real Estate Principles gives a great overview of the Real Estate Industry. Readers will understand what drives Real Estate markets in the short, intermediate, and long run, connections between the Capital Markets and the Physical Markets, and Residential and Commercial property analysis. The effects of the legal and regulatory environment are explored, as well as financing, cash-flow analysis, and models.
Real Estate Finance provides a similarly broad perspective but with a more sophisticated discussion concerning factors affecting financial decisions. A larger portion is devoted towards income-producing properties, tax treatments, equity financing, effects on portfolio management, the secondary mortgage market, and investment decisions.
The Appraisal of Real Estate goes into great depth in discussing what the role of an appraiser is and how to conduct an appraisal. I often hear from other Realtors and investors about how unreliable appraisers are. When asked if they understand how appraisers work, their methodology, how they gather data and process it, I’m usually met with blank stares. There is much more to appraising then simply looking at comparable properties or doing a quick cash flow analysis.
Investment Analysis is the book EVERYONE should read. You need to have a firm understanding of the underlying principals covered in the above books in order to grasp the concepts in this one. Greer/Farrel cover Market Efficiency, land utilization, market research and forecasting, traditional and contemporary valuation and risk measures. Learn how to conduct a feasibility report, interpret probability distributions, utilize a mean/standard deviation approach, and discover why the certainty-equivalent techniques have issues.
Property Management is a great short read where Jaffe examines the literature of Real Estate Investment Modeling, investigates data analysis, sensitivity analysis, and how management decisions affect overall value. Whether you agree or not with his conclusions, taking the time to see how he systematically analyzes the effects of management will help you develop your own analytical methods.
Macroeconomics exerts such an influence over the national and global economy. Especially in these uncertain times, it is important to have a grasp of how fiscal and monetary policies shape the short and long run rate of output. The recent credit and economic crisis has shown how important an understanding of globalization and the interconnectivity of all the various markets are. If you believe that your investment property is influenced only by local market factors, think again.
Photo Credit: faeryan