CC BY
21TECHNICAL SCIENCES
ECONOMIC EXPERTISE AS A TOOL OF THE REAL ESTATE MANAGEMENT
Paladi A.
PhD student 4th year, Technical University of Moldova, PhD school "Economics, Finance and Management", Chisinau
DOI: 10.5281/zenodo.6882611
Abstract
This article touches on some important aspects of using the economic expertise in the real estate management. The article contains the study of the legal framework refered to the activity of economic analysis and to activities related to the exploitation of real estate, including the techniques and methods of real estate valuation. In a particular case there are analyzed the methods of calculation the indicators of major importance, which are used in decisions related to the subsequent operation of the real estate or its demolition. This condition describes the calculation techniques of different types of depreciation of buildings and erections, as well as the methods for determining the risks related to the operation of real estate. The content and complexity of the economic expertise is determined in the base of the process purpose. The possible effects of economic expertise are presented as decisionmaking concepts related to changes in intern or extern policy in the use of real estate.
The difficulties related to the gaps in the legal normative framework regarding the regulation of the activity of economic real estate expertise are reached. Also, several methodological solutions are described for calculating the economic indicators related to the condition of real estate and the risk of activity, used to make decisions on the management of these assets. These solutions are systematized using techniques and means such as description, comparison, measurement, observation, experiment, analysis, induction (from particular to general). The basic hypothesis of this paper is that the wider use of real estate economic expertise services, as well as the regulation and promotion by the state of this activity, in the legislative / normative, institutional and methodological sense, will contribute to accelerating the development the real estate market in the Republic of Moldova and reducing the risks of inefficient use of real estate asset. The main objectives are to develop the theoretical foundations of the economic examination of real estate for effective management purposes.
Keywords: real estate economic expertise, non-residential real estate, real estate valuation, depreciation, risk analysis, real estate management.
JEL Classification: R21; R11; R14; R31; R32.
INTRODUCTION
Overall, real estate heritage is the most important economic pillar of any state after the human one. Real estate market indicators reflect the state of the country's entire economic system. The efficiency of the real estate funds use is an objective of major importance. Real estate generates nearly a third of Gross Domestic Income (GDP) for developed economics, creates millions job-places and is the source for 70 percent of local government revenues, (Ling, 2005:16). Thus, the monitoring and regulation of economic and legal reports on the real estate market can be considered some of the main objectives of the national sustainable development strategy.
The real estate specific character (positioning, composition, related infrastructure, etc.), as well as the actual develop tendencies of relationships in the Moldavian real estate market, determine the complexity of achieving various goals expected in the processes throughout the whole life cycle of real estate. Thus, the application of real estate investigation techniques and methods for various complex situations is increasingly required. The management of different types of real estate (office buildings, commercial spaces, residential property, industrial assets, etc.) involves different aspects of risk management and insurance, as well as important conceptual elements related to the relationship between real estate and the environment. The concept
of Strategic Management involves planning and implementation of administrative actions regarding the exploitation of real estate founded on the basis of a professional analysis of economic indicators that characterize the development dynamics of the respective real estate market segment. The described analysis can be performed within an economic expertise of the real estate with the application of different calculation techniques and applied methods of economic analysis. Hence the imperative to create methodological support in conducting economic expertise of real estate appears.
The current situation of the real estate market in the Republic of Moldova, characterized, according to the 2020 Report of the Department of Development within the United Nations, by the political, economic and social crisis, has created a vacancy in professional economic expertise services. The lack of services for the economic analysis of real estate causes the insufficiency in the effective organization of real estate exploitation, the alteration of the business financial circuit involved in real estate and the ineffective use of the economic potential of the managed property. Currently, the deficit of economic expertise services is covered with similar activities related to real estate valuation, accounting and managerial audit, etc., provided by specialists from different branches of the national economy. Doubtful interpretation of the reports, executed by these specialists in view of the study results, as well
as of the scenarios of administrative decisions that follow, have a negative effect on the concept of expertise, as well as on the dynamics of development of relations on the real estate market.
The predominant cause of the created situation is the lack of the legal normative framework regarding the definition and regulation of the activity of economic expertise of real estate. The absence of methodologies and application rules for the practical use of the established principles, forms litigious situations leaves the room for the creation of the corruption phenomenon. In particular, this phenomenon is reflected in the use of public funds from the state patrimony and local / central public authorities. The irrational use of public resources weakens local and national budgets, creating obstacles to reform and sustainable development.
Due to the legal non-coverage of the economic expertise activity in Moldova, the university institutions do not complete the curriculum of specialties with this type of activity and do not form the teacher staff in order to provide the market with specialists in this field (Kulacov, 2015).
In the order of ideas described above, the present research is focused on the promotion of a new economic activity under the essence of the notion of economic expertise of real estate. The adoption of economic analysis techniques can serve as a basic concept for the development of the new branch. The application of the known methods of real estate valuation and their connection with the principles of economic management, with the specifics of the real estate market will structure the procedural concept when executing the economic expertise.
From the point of view of managerial implications, the results of this research mean establishing clarity for requesting quality services from economic agents on the real estate market, giving them everything they need at the right time during the expertise procedure.
RELEVANCE OF RESEARCH.
The socio-political changes of the last decade of the twentieth century in Moldova and the adjacent Eastern European region concerning the release of land and housing from state assets, as well as the denationalization of non-residential funds, have caused the active development of the local real estate market. The destruction of the state structure and launched on the real estate market of other economic and legal deals, led to the initiation of the process of forming an autonomous branch of economic activity related to the professional administration of real estate or other words, real estate management (Stiglitz, 2000:721). The increase in the number of real estate objects involved in the the market, the complexity and heterogeneity of the structure and composition of property complexes lead to a worsening of the problem of real estate management effectiveness.
Actually, the term real estate is used in three fundamental ways: (1) the tangible assets of land and buildings, (2) the bundle of rights associated with physical assets and (3) the business activities, related to the acquisition, operation and disposition of physical assets, (Ling, 2005:16). In the current conditions of the legal framework developing in the field of real estate
management in Moldova, including the Civil Code in order to define the notion of real estate, a priority has the development of the real estate management methodology and establishing characteristic indices on the effectiveness of real estate use.
The estimation of the indices for measuring the efficiency of the operations performed in the use of real estate largely refers to the operation with the market value of the examined property. The unregulated use of the normative-methodological framework in the field of real estate valuation within the economic expertise, often leads to the distortion of the results, which forms the urgent task in systematizing and assigning the corresponding theoretical approaches.
Currently, there are no unified methods for approving the results of the examination, and the methods used in practice are characterized by a high level of subjectivity, the phenomenon of bias in decisions or recommendations and a number of other managerial issues. Therefore, the development of a matching technique that would help minimize the subjective factor will improve the accuracy and reliability of the result, as well as their interpretation in relation to the chosen development vector (Stiglitz, 2000:10). The need to study the methodological fundamentals of economic examination of real estate and its scientifically based analysis, systematization of economic examination methods and development of methodological tools for agreeing the results of the examination, ensuring an increase in the reliability of the result, determined the relevance and choice of this study.
DATA SOURCES AND USED METHODS
The methodological basis of this research is the analysis and systematization of the works of domestic and foreign scientists concerning the examination of the real estate value, the current state of the local real estate market, investment analysis on the efficiency of real estate investments and real estate management. Within the researches, references are made to legislative and regulatory acts in the field of real estate management and evaluation activities, methodological and instructive materials, informative resources of the global electronic network, the educational framework. During the research, general scientific techniques and methods were used - analysis and synthesis, induction and deduction, grouping, comparison and analogy, scientific abstraction, statistical methods.
OBJECTIVES OF THE STUDY.
The main purpose of the study is to develop the theoretical bases of the activity of real estate economic expertise, ensuring an increase in the reliability of its results. Being a part of research of the problems related to the field of economic expertise, theis work will contribute to the achievement of the following main objectives identified in order to develop this activity:
1) Introduction of the new concept of the real estate economic expertise in the national economy with the delimitation of its aims and attributions. Based on the analysis, the general concepts of real estate management will be optimized in terms of the economic foundation of decisions related to real estate management in the specific conditions of the real estate market, (Stiglitz, 2000:10);
2) Development of a unified classifier of economic expertise services of real estate, allowing the identification of the object of expertise in the real estate market to determine the priority of approaches used for economic expertise by destination and use of real estate;
3) Based on the analysis of the content of the existing principles of real estate expertise, establishing their priority in the use of economic expertise approaches;
4) Carrying out the study and systematization of the modern methods of economic expertise for the observance of the methodological approaches of their unification and standardization;
5) Reasonably theoretical systematization of the information base of the technical-economic expertise of the real estate object;
6) Testing the developed methodological bases of the economic examination of the real estate object, which will ensure an increase of the reliability of the result;
7) Development of a methodological support framework for making managerial decisions on the use of property based on the results of the economic examination.
LITERATURE REVIEW
The initial scientific and technical basis of the research serves the theoretical methodology and the concept on the problems related to evaluation, presented in the theories of classical and neoclassical economies referred to in the works of scientists A. Smith, K. Marx, D. Ricardo, K. Menger, L. Valras, W. Pareto.
Research in the field of activity and trends in the real estate market are widely described in the works of scholars of contemporary schools in regions with different histories of socio-cultural development and political regimes. Thus, the topic of economic investigations on real estate as a financial capital asset with economic potential is widely described in the works of contemporary scholars.
Joseph E. Stigliz, recognized as one of the leading economists of his generation has made important contribution to virtually all of the major subdisciplins of economics: macroeconomics, monetary economics, public and corporate finance, trade, development and industrial organisation. John Driffill focussed his research on macroeconomics, monetary policy and real estate market. David C. Ling has included in his academic and professional publications some articles on housing policy and economics, mortgage markets and pricing, private commercial real estate investments, publicly traded real estate companies and performance evaluation. Wayne R. Archer researched in his publications on office markets, house price indices, mortgage prepayment, mortgage pricing and mortgage default risk. The fundamentals of real property, value appraisal principles, interests and ownership in real property, and the competition between real property with other investments of capital are reviewed by some american appraisers in their framework in the Appraisal
of real estate (the twelfth edition) inside of Appraisal Institute, USA.
Due to the historical development and geopolitical factors, the stages and directions of evolution of the Moldovan real estate market are simultaneous with the homologous processes in the post-Soviet region and require the solution of the analogical problems faced by these countries. In this mean, the works of specialists and scientists from the Eastern European region are targeted in order to research the economic phenomena related to the economic expertise of real estate. Through the studied, the works of A.G. Greaznova and M.A. Fedotova, Russian scientists, who carry out the basic notions, methods and principles of real estate valuation in the light of modern market relations. The possibilities of using different mathematical methods in heritage assessment, methodology and practice of mathematical modeling based on correlation and regression analysis are set out in the papers of Russian scientists S.B. Gribovschi and S.A. Sivets. The development of the theoretical basis of the economic expertise of real estate is found in the works of L.B. Teterkina. The concept of surveying services, as an autonomous compartment of the economic activity of real estate management are covered in the works of K.Y. Kulakov, V.M.Cojucar and O.O.Vedimanova.
The issues studied are to some extent taken into account in the work of Moldovan scientists. Important aspects of the evaluation are researched by F. Bajura. The effective management of real estate by the local public administration for the formation of local budgets is studied in the works of I. Paladi. The concept of full cost, comparison of value and cost is addressed in the works of A. Muravschi.
It should be noted that research in the field of real estate economics is largely focused on aspects of the real estate market, the valuation of real estate as a process and the determination of different types of values for different specific conditions. Unlike most of the above-mentioned investigations, this paper focuses on economic expertise, which integrates valuation as well as other operations required when making decisions regarding the management of real estate throughout their life cycle. The evaluation is intended as a component part of the economic expertise and not as its purpose.
TASKS AND STAGES OF EXECUTION OF ECONOMIC EXPERTISE
The essence of the economic expertise is the analysis of the calculated retrospective and prospective indicators, which characterize the real or anticipated (expected) economic use of a real estate. As a result, it is the formation of a professional opinion on the current or expected economic efficiency from the use of the real estate concerned, for various purposes, for example, to the planning of the funds return spent for the acquisition of rights over this property, (Greaznova, 1992:36).
Figure nr. 1 presents the main tasks solved in the process of economic expertise of the real estate.
♦ THE EFFICIENCY OF THE INVESTMENT PROJECT ANALYSIS
DETERMINATION OF THE ECONOMIC RESULTS WITHIN PLANNING OF PROJECTED OBJECTS / STRUCTURES
REAL ESTATE EVALUATION
MANAGEMENT SYSTEM EFFICIENCY ANALYSIS
FORECASTING CASH FLOWS AND PROPOSING DEVELOPMENT STRATEGIES
♦ MONITORING OF THE EFFICIENT USE OF REAL ESTATE
Figure nr. 1 The basic tasks of real estate economic expertise
The definition of the economic expertise, as well as its content, strongly indicates that the economic examination of the real estate must be carried out systematically, starting with the prenatal period and until the abolition of the object. Of course, in this case, the objectives of the examination and the management decisions taken on the basis of its results will be different, (Kozhukhar, 2008).
Economic expertise includes all types of analysis related to the evaluation of the monetary costs of the factors that influence the managerial decisions regarding the exploitation of the good. From a methodological point of view, assessment is defined as a scientific direction of applied economic analysis, the main task of which is to establish the most probable sale or purchase price of an asset based on an analysis of the dynamics of the forces of demand for this asset and its supply in the corresponding market segment (Gribovschii, 2008:8). Economic expertise involves:
- analysis and definition of the aggregation characteristics of different markets associated with the viewed object;
- market analysis for analogue objects, the parameters of which are used in a comparative approach to value estimation;
- the amount of costs determining by types of production activities, financial system parameters, level of taxation, types of risks, etc.
The economic feasibility of a project for the development of economic activity, related to the management of real estate, is one of the main factors in determining a real estate management strategy. In the process of economic justification for the selected planning period, revenues and expenses related to real estate are forecasted. Funding issues are resolved and cash flows from the property and discount rates that meet the owner's requirements are determined. Particular attention is paid to interest and losses generated by funds, rental income, administration costs, capital repairs and cosmetics.
For a rational individual or firm, the first step in the economic analysis of any chois is to identify what is possible - what economists call the opportunity set, which is simply the grup of available options (Stiglitz, 2000:28). During the economic expertise it is necessary to perform the following steps:
- Analysis of the existing use of the property;
- Determination of the planning period of the property expenditure and revenue budget (short-term budget contains data for less than one year, annual budget is a consolidated statement of projected revenue and expenditure for one year, long-term budget predicts data for more than a year - 3-5 years.);
- Preparation of the list with all possible strategies for managing the object;
- Drawing up the list of activities in the main areas of real estate management in the context of potential management strategies;
- Planning the amount of income and expenses from using the property in the context of potential management strategies.
At the first stage of the economic examination, it is necessary to make an initial assessment of the object, as well as to consider all possible prospects for the management of the property, i.e keeping the object for personal use, or selling it. The economic examination of a real estate object includes many so-called sub-examinations, each of which plays a specific role and is taken into account in the final decision. A number of classical examinations relevant to the economic expertise of real estate are presented below.
During an economic examination of the building, the following procedures must be carried out:
1. Analysis of the location of the area where the assessed property is located;
2. Real estate market analysis;
3. Analysis of current proposals;
4. Analysis of the existing use of the property;
5. SWOT analysis of the project;
6. Evaluation of the project cost structure;
7. Determining the possible types of risks;
8. Evaluation of the main indicators of the efficiency of the investment and construction project;
9. Determine the cash flow planning period;
10. Choosing an object management method;
11. Forecast of the amount of income and expenses from the use of the property in the context of the selected management strategies.
At the next stage, options for the revenue and expenditure budget are developed, depending on the types of property management. In summary, the budget
is incorporated with the property management strategy and plans for a certain period.
The principle of best and most efficient use shall be taken into account in the examination. Following the familiarization of the legal framework, different ways of using the analyzed object are studied with reference to the urban, agro-zootechnical and legislative delimitations for the region.
When estimating the current value of the appraised good, the specifics of the type of value calculated according to the development strategy, the type of ownership, the banking and legal restrictions will be taken into account.
EVALUATION METHODS AND SOME CALCULATION TECHNIQUES
The study of methods of economic expertise of a real estate object has shown that so far, experts are exposed in different ways on the techniques used and methods of economic examination of real estate. In the context of this article, the methods for calculating the value of real estate will be analyzed, which create the basic background on the compartment of economic expertise.
Using the cost method involves calculating the value of the land, which can be done through several approaches. The methods of economic expertise of the land, the same is to be attributed in accordance with the content, to certain theoretical approaches.
The best use will be considered depending on the value of a number of physical factors (utility, compliance, changes, etc.), economic (expected income, residual value, productivity, source of revenue generated, market demand, etc.). and legal (membership, type of property, administrative rights, restrictions, etc.)
The application to the economic expertise of the real estate of the cost method presents the estimation of the value of the real estate as the sum of the land value, the value of the land improvements and the income of the entrepreneur, diminished by the value of the accumulated depreciation. The cost method of the improvements is difficult to unequivocally refer to the cost approach, as it also implies the presence of the characteristics of the revenue approach expected from the realization of the project by the contractor. Moreover, the value of the real estate also includes the part of the land, which is not subject to the classical principles of decomposition of construction elements into materials and the work granted for the construction of buildings. The value of reconstruction or replacement of constructions and improvements in the field determined by comparing the units of measurement of analog objects, the method of segregated costs, the quantitative method (SM 249:2004). Accumulated depreciation consists of economic, functional and physical depreciation. The entrepreneur's income is calculated from market data or established by regulations.
The land value is calculated using different methods: the method of analyzing comparable sales (by the method of direct comparison, the method of allocation and the method of extraction) and the method of income (which includes the method of direct
capitalization, the residual method and the method of subdivision).
The method of comparative analysis of sales involves the following steps:
- Market analysis and selection of analog objects;
- Verification of the veracity of the data collected;
- Preparation of the comparative analysis by elements of the difference between the compared objects;
- Adjusting the values according to the characteristics of the compared objects;
- Reconciliation of results and calculation of value.
When applying the method of analysis of comparative sales, the main conditions and delimitations regarding: completeness and veracity of information, free transactions between independent parties, information priority, sequence of adjustments and subjective factors in determining the final result must be observed. When determining the adjustments, the even comparison method, the secondary data analysis method, the statistical analysis will be used.
The income method reinforces two basic approaches: the direct capitalization method and the cash flow discount method. The direct capitalization method involves calculating the value of real estate as the ratio of net operating income to the capitalization rate. The net operating income is determined by deducting from the total income generated by the real estate the fixed and variable operating expenses necessary to maintain this asset during the calculation period in the functional state. The capitalization rate is determined by different techniques (comparable sales analysis method, effective gross income multiplier method or investment group technique) depending on the economic indicators of income, expenses, efficiency, share of equity / borrowed, construction share estimated from the value of the complex, risk indicators and others.
The method of discounting cash flows is determined based on net operating income, reversal and discount rate, calculation period. When updating cash flows, it is recommended to include the gross rent method, which involves determining the income characteristics of analog objects and the object of the examination. The reversal is the probable price at which the property can be realized after the end of the period of use. From the practice of international valuation, following the principle of return on investment, the value of the good is to be generated by the given good within 3-5 years. The discount rate is determined by the calculation techniques established by the addition method. Extraction method or alternative investment method.
In addition to the application of classical methods of valuing real estate, the tasks of the expert include the analysis and estimation of risks and dangerous possibilities of a physical, economic, social, legislative nature. As an example, the calculation of adjustments for the political crisis variable, bank rate instability, migration and reduction of human potential, social impact and other influencing factors can be used in the calculation of expenditure. All of these are determined
quantitatively and included in the study results. A priority in this sense is the income method by capitalizing the operating income with the possibility of including in the component of the capitalization rate the risk factors through the alternative investment method.
DEPRECIATION
One of the important components of economic expertise is the study of economic and functioning status, which is assessed by analyzing data on the state of consumer demand in the real estate market segment. When conducting the economic expertise, it is necessary to assess the current and technical condition of the property. If for the related land the physical condition in many cases does not change over time, the field improvements undergo significant changes during the operation. In the context of this chapter, the estimated object is buildings, constructions, edifices or annual plants located on the afferent land.
The technical condition of the real estate object includes a number of indicators, namely the deterioration of the strength of buildings, the deterioration of technical communications, the life of the structure at the current level of operation. An important point during the economic examination of real estate is the analysis and evaluation of documentation for connecting buildings and structures to communications, such documents include
admissions, technical circumstances, permits. Depreciation allows investors to reduce the amount of taxable income they report by an amount that is intended to reflect the wear and tear that commercial properties experience ovet time, (Ling, 2005: 583).
The technical defects of the constructive elements are reflected in the physical depreciation and are represented as the percentage rate of the value of the object. In the cost approach, the depriciation attributable to all causes is extracted from the market, or calculated when market extraction is not possible, and deducted from the cost to arrive at the depreciation cost, (Apprisal institute, 2001:364). When determining the physical depreciation (wear) of the real estate object at the level of complex and integral construction, the method of analysis of constructive elements is used, which allows calculating the physical depreciation for each element and determining the wear per object according to the share of elements in the volume (cost) of the building (Norms RSSM, 1982).
The technical and economic life of the building is a decisive factor in determining the effectiveness of the use of the examined structures for different types of operation. Thus, the use of an old building requires the prophylaxis of measuring the technical condition of the constructive elements. Schematically, the dynamics of income flows and maintenance costs of the building are shown in Figure nr.2 depending on the stages of its life.
Figure nr.2 Scheme of dynamic changes in the size of income and expenses for maintaining the real estate
depending on the life cycle of this property.
The changes in the time of the amounts of income and expenses is often neglected by the evaluators, which changes the technical-economic indicators regarding the forecasted income and expenses during the calculation period. Moreover, determining the most effective way to use the construction requires a detailed analysis of the materials and techniques used in the construction of this good, in order to withstand strength, fatigue and mechanical defects. Neglect of these factors, as a rule, increases the risks of failure to carry out the development project proposed by the economic expert. The size of real estate maintenance costs increase depending on the age and intensity of use of the building. Using the principle of utility of the real estate, it will be considered that the market value of the non-residential real estate is established in direct function with the income generated by this property. The determination of the market value by capitalizing the revenues, as well as by settling the cash flows, will
take into account the changes in the technical condition over time, which introduces the respective changes in the quantities of income and expenses.
One of the direct tasks of the economic expertise of real estate is to determine the critical points for the object of analysis and present the optimal scenario of development of real estate depending on its condition with the generation of maximum possible profit. The refractive points (M) and (P) in figure no. 1, denote situations when the owner is faced with the need to make decisions in the administration of real estate. Critical point (G) is a crucial indicator, which informs about the negative profitability of the good and its economic uselessness. In the absence of other decisive factors, in point G, the object is dismantled or re-profiled with significant additional investments (deforestation, demolition, reconstruction, consolidation, etc.).
In the same extent, the external factors influencing the incomes are to be taken into account: political, social factor, competition, corruption, the vector of the national economy, migration, etc. An important element can have the aspect of the historical value of the analyzed real estate.
The provisional regulation on the valuation of real estate, approved by the Government Decision of the Republic of Moldova no. 958 of 04.08.2003 establishes two methods for determining the physical deterioration, based on the period of operation of constructions:
- the method of effective age, which involves the determination of physical deterioration as a ratio between the actual age of the building with the physical life or the sum of the actual age with the remaining physical life;
- the method of economic life, which expresses physical wear and tear in relation to the effective age and economic life.
Both methods mentioned above, stipulate the operation with subjective and unstable terms. For example, notions such as "remaining life" or "effective age" are not grounded in a clearly defined normative support. Effective age is the age indicated by the condition and utility of a structure an dis based on an appraiser's judgment and interpretation of market perception, (Apprisal institute, 2001:385). Thus, in order to avoid dubious interpretation, the formulas related to the age of the building are carefully targeted in practice.
One of the steps in applying the cost method of real estate estimating is to calculate the reproduction or replacement value of a building, which is then adjusted for accumulated impairment. Currently, specialists in the field of economic expertise specify the problem associated with taking into account the difference between these types of value, which affects the outcome of using the cost approach (Teteorkina, 2007). It is known that the cost of reproduction involves the use of the same materials, design and quality as the object evaluated. The replacement value, as opposed to the reproduction value, determines the cost of an object using new materials, modern standards and design, which is determined by the requirements of consumers and the market as a whole. Therefore, correlating these concepts with the definition of functional depreciation, we can conclude that the value of reproduction initially takes into account the functional depreciation, as opposed to the value of replacement. The determination of the functional depreciation is performed for the calculation by the cost method of the replacement value. Other types of depreciation - physical and economic - should in any case be taken into account when applying the cost method, as physical depreciation is caused by damage to the object and economic - by environmental change.
The determination of the physical depreciation is performed regardless of the type of the established value. The determination of the economic depreciation is implemented both for the reproduction value and for the replacement value.
Economic depreciation consists of external cumulative factors, which influence the value of real estate:
The level and dynamics of population growth; The level of unemployment; The educational level of the population in the region; Average income of economic agents; The level of development of the Urban Infrastructure; The volume of investments from basic funds of economic agents; The level of insurance of the population with housing; The level of corruption.
The amount of the economic depreciation is determined as the sum of the depreciation caused by external factors, weighted at the rate of the factor in the influence grid. The grid is established by experts, depending on the source of information existing the first experimental method.
RISK ANALYSIS
A component part of the economic expertise of real estate consists in identifying and assessing external and internal risks. The assessment of the value of risks and measures to mitigate them is based on an in-depth analysis of the political, economic, social situation in the region and at national level. The risk indicators, determined following the analysis, can cause the cardinal decisions in the real estate management processes, until their realization in unfavorable conditions. One of the types of risks calculated in the economic expertise is economic or operational risk. It is important to be able to measure both the potentioa lisk and expected return assoiated to owning the asset (Ling, 2005:633).
As an example, the magnitude of the risk of exploitation of a commercial building (mall, market, open market, etc.), intended for rent by economic agents for the realization of goods, can be examined. The size of the risk depends on the manager's abilities to control the cost structure for the maintenance / servicing of the given good and to take into account their sensitivity to the fluctuations of the space occupancy rate. Thus, some expenses vary directly or indirectly in proportion to the amount of space sent in the lease, being considered variable expenses. Other expenses have zero elasticity in relation to the number of rooms or the rented area, under the conditions of an established production capacity, and are called fixed or constant expenses. Fixed expenses diminish the flexibility of the business, because they do not simultaneously reflect the change in the activity rate of the spaces,( Rata-Munteanu, 2005). The leased spaces become the object on which the constant expenses are distributed. The larger the space for the lease, the lower the share of constant expenses, which will be found in the amount of rent on the leased area and the effect of the influence of the volume transferred on rent on the operating result will be lower.
The analysis and evaluation of the economic (operational) risk and of the factors that determine it can be performed based on the analysis of variability (sensitivity) of the profit. This study is mainly based on the notion of operational leverage which aims to assess the sensitivity of the financial result to changes in the level of core business.
The operating leverage ratio, or Degree Operating Leverage, is determined as the ratio between the Contribution Margin and the Operating Profit. The contribution margin shows the difference between
Sales Revenue and Variable Consumption (or Expenditure).
Operating profit is determined as the difference between the Contribution Margin and Constant Expenses.
The break-even point is the starting point in the analysis of the "sensitivity" of the company's results to changes in sales volume, because it makes it possible to determine that sales volume in correlation with such a total contribution margin that would cover constant consumption and maintenance costs. . The operational leverage ratio characterizes the degree of balancing the functioning of the real estate that generates income, expressing the relative variation of the result from the operational activity to the calculation of interest, according to the relative variation of the physical sales volume (rent / lease), (Neli Muntean, 2010/73).
THE PURPOSE OF ECONOMIC EXPERTISE
The economic expertise of a real estate object is a financial evaluation of each of the factors that influence the degree of utility and rarity of this good. This type of examination speaks of the value of real estate, and its result is the value of the object in the form of a monetary equivalent. The result of the economic expertise is the substantiation of the scenario of using the real estate according to the economic indicators obtained within the expertise. The main indicators that determine the performance of one or another proposed scenario are efficiency and profitability.
Efficiency, as a qualitative characteristic of the exploitation of real estate, involves the application of physical and intellectual effort, expressed in a volume of living or past work consumed. The general criterion of efficiency in economics is value, which is a subjective notion, in the sense of someone's desire to have a certain good, the appreciation of value being quite difficult, especially in terms of maximizing the profit and utility of a good, which implicitly involves and the regulatory framework links economic instruments and policies, based on a comparison of several possible options.
Profitability is an indicator that is determined as the ratio of profit to the value of production costs, investments in real estate used to obtain income.
Another notion of expressing the results of the economic expertise of the real estate is the economic feasibility of the investment project. Economic feasibility is the analysis of the costs and revenues of a project in order to determine whether or not it is logical and possible to complete it. The economic feasibility study assesses property income and expenses. It analyzes factors such as the repayment period, calculates cash flows, takes into account the discount rate, income and property expenses. Income from rented premises or their sale, administration costs, and expenses related to current, major repairs and operation of the property are taken into account in detail.
In the process of managing a real estate object, the results of the economic expertise are used to analyze the possible scenarios for the development of the activity related to the exploitation of the real estate, (Greaznova, 1992:32). Therefore, economic expertise
is a constituent element of the management decision-making algorithm when choosing a rational use case. Some of the important decisions regarding the increase of the efficiency of the use of the real estate according to the internal and external factors can be called:
- Changing the way of using the real estate. In the context of this effect, the actions of reprofiling the managed asset, introducing changes in the functional portfolio of the asset, reconstruction / repair of buildings and edifices, elimination of functional depreciation factors, and other effective actions of optimizing the operation of the real estate are merged;
- Introduce changes in rental / lease rates. The analysis of the market segment is reflected in the modification of the rent / lease policies of the real estate spaces / surfaces. Changes in the local or national market may cause the payment amount to rise or fall. An economic analysis of market dynamics helps managers / owners avoid the crisis of financial losses due to critical situations;
- Modification of the administrative structure regarding the real estate management. The efficiency of the use of the human environment in the field of real estate management is reflected in the decrease of the operational expenses for the maintenance of the administrative and service apparatus. A decisive measure can be the delegation of the real estate administration attributions to another economic agent involved in real estate management;
- Sale of real estate.
When making managerial decisions on determining the most rational option, market value is proposed to be considered as a criterion that reflects the economic feasibility of the use (current or alternative) of the buildings chosen in the previous stages. The value of real estate in accordance with the income approach is determined by the value of the discounted net income, obtained from the use of the object, taking into account the values forecast during the expected period of operation according to the current mode of use. The determination of current net income for alternative uses is required for selection based on the assessment of the rational alternative for the maximum amount of net present value. The administrator always has the right to choose - to use the property in the future or to sell it. That is, at the stage of comparison with the market value criterion, the sale should be considered as an alternative to the use of the property (Hajnal, 2019). In order to make a decision in this direction, a comparison should be made of the market value and the net income settled after current or alternative use, selected on the basis of the grid of use.
RESEARCH RESULTS AND DISCUSSIONS
Currently, for the most part, non-residential real estate is perceived as a material spatial basis on which economic activities take place. Also, real estate presents an integral part of the accounting assets of the vast majority of economic agents, as well as the object of economic and legal reports, starting from the decision-making regarding the implementation of projects of creation / formation or construction / development, use, trading and until its abolition, as the case may be.
In this paper it is proposed to promote the concept of "economic expertise" as an economic activity - a component in the services of the parties involved in real estate management. The real estate economic management industry will be improved with the help of the application of economic expertise, ensuring the adequate administration of the current conditions of the real estate market. The classification of real estate objects according to the basic principles of economic expertise will determine the priority of the principles and approaches used according to the characteristics of the object. This allows you to create a methodological mechanism for managing a property on a new logical basis.
The methods of economic expertise are to be improved by:
a) their systematization, which makes it possible to determine the relationship of the methods with the appropriate approaches to the examination and to increase the accuracy of the examination results;
b) development and structuring of the basic methodology for the use of costs within the economic expertise, reflecting the procedure of accounting for wear depending on the type of the determined value of the building;
c) the development of the methodological bases for the coordination of the economic expertise results of a real estate object using a structural model, which does not allow to take into account the features of the object of examination and to increase the reliability of the result;
d) establishing the definition of the economic parameters of the management object in the established volume in order to analyze the most efficient use. The establishment of the scope of the parameters determined during the examination is made in accordance with the terms of reference for the contract for the execution of the economic expertise;
e) removing the current contradictory aspects in the application of real estate valuation methods, as well as economic indices for the unambiguous interpretation of the results of the expertise;
f) the full introduction of the concept of risk in the economic management of real estate;
g) stratification and creation of possible solutions for the protection of real estate businesses and the avoidance / reduction of situations of failure to manage real estate.
The lack of the legal normative framework to define the activity of economic expertise of real estate, as well as the methodological framework to support the given practice denotes a vacuum in the real estate market and presupposes the creation of illicit structures to serve the given segment without guarantees, attributions and responsibilities. Solving these problems, which are essential for the activity of economic expertise of real estate as an element of administration and control, makes it possible to increase the reliability of the results of the expertise.
CONCLUSIONS
Economic expertise is a key tool for improving the efficiency of real estate operation. In order to perform a high quality economic assessment, it is necessary to
perceive the current state of the object, the current requirements and the final purpose of its use. The main indicator of real estate profitability, as a rule, is its financial efficiency. In this respect, the main focus in the economic examination should be on financial criteria, understanding their economic essence and the nature of their dependence on external factors.
This paper defines the concept of economic expertise of real estate as an integral part of the national economy and denotes the importance of implementing this service on the real estate market. The development of real estate valuation methods in the context of the administration of these assets will contribute to the simplification of the operation of real estate and will ensure the efficiency of this operation.
In conclusion, we can confirm that the relevance of the economic expertise of real estate comes from the fact that it is updated and is in line with the general trend of opinions in the national economy. Importantly, this activity can also serve as a tool for a state policy that must be applied to achieve the desired economic growth by raising the efficiency of the use of real estate. Without such a regulatory and transparent study, it would be difficult to establish appropriate monetary and economic policies for the sustainable development of the real estate industry.
References
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СИНХРОННАЯ МАШИНА С ПОСТОЯННЫМИ МАГНИТАМИ
Баширов Б.Э.
НИУМЭИ, студент
PERMANENT MAGNET SYNCHRONOUS MOTOR
Bashirov B.
NRUMPEI, student DOI: 10.5281/zenodo.6882633
Аннотация
Синхронная машина (СМ) - электрическая машина переменного тока, частота вращения ротора которой равна направлена в ту же сторону, что и скорость электромагнитного поля. В Синхронном генераторе с постоянными магнитами на роторе обмотка возбуждения отсутствует, а магнитный поток возбуждения создаётся благодаря постоянным магнитам, а не катушкам. Целью исследования является проектирование синхронного генератора с постоянными магнитами в системе электроснабжения автономного питания.
Abstract
Synchronous machine (CM) is an alternating current electric machine whose rotor speed is directed in the same direction as the speed of the electromagnetic field. In a synchronous generator with permanent magnets on the rotor, there is no excitation winding, and the magnetic flux of excitation is created due to permanent magnets, not coils. The aim of the study is to design a synchronous generator with permanent magnets in an autonomous power supply system.
Ключевые слова: синхронный генератор, коэффициент.
Keywords: synchronous generator, coefficient.
В настоящей работе является рассмотрен примерный расчёт и проектирование синхронного генератора с постоянными магнитами мощностью 1кВт. Для этого требуется:
1. Определить главные размеры;
2. Выполнить расчет пазов статора;
3. Начертить статор;
4. Составить схему обмотки;
5. Произвести моделирование проектируемой машины для проверки результатов полученных расчётов.
Для того чтобы спроектировать нужный нам синхронный генератор с постоянными магнитами, необходимо рассмотреть систему, для которой он проектируется.
Данная система электроснабжения предназначена для обеспечения электрической энергией постоянного тока.
