Many students think of real estate as a financial opportunity, especially with all of the talk of price bubbles. While it can be profitable, it is important to also remember the link between finance and creating real value because people live, work, shop and play in those buildings; the only way to make money is if somebody is paying to live, work, shop or play in the space that you are selling.
Only people with a very narrow view see the real estate business as being only about finance, revenue, cost and capital gains. The interesting part of the real estate business is searching for ways to create value from space and location. (The business part of this search is about finding ways to appropriate some fraction of that value to pay for the costs of doing business.) Continue reading