APPLIED ECONOMICS NOTES

RENT:
Is the use of a property with a certain amount or the price paid use for the land and other natural
resources or factors of production that is fixed supply. It is traditionally associated with land, which is
fixed factor of production.

 The concept of economic rent applies to economic factors, not just land.

Economic rent
is a payment in excess of opportunity costs. According to David Ricardo, an influential British classical
economist in early1800s, rent is a surplus of revenue over cost, which arises due to differences in the
level of usability of the land.

 The scarcity of land becomes the concept of rent.

Rent on Land

 Land is one of the most common type of investments aside from owning shares, cash, and
securities.
 In order to analyze how the price for the use of land is determined, we must look at the supply of
land and its level of demand.
 Since the supply of land is perfectly inelastic, the level of demand is what determines the rent on
land.
 Since supply of land is fixed, demand becomes the determinant of rent.
 Aside from renting the land out, the owner of the land can also opt to sell the land at a higher
price to earn a profit

HOW DOES IT BECOME A PROBLEM IN THE ENTERPRENUERS:

* Late Rent Payments – Constantly dealing with tenants who do not pay on time can be incredibly
frustrating, especially if they are repeat offenders. Also, waiting on tenants to pay could be financially
draining for landlords.
* Excessive Stress Over Property Management Responsibilities – Property management is a critical
part of being a landlord, but it certainly is not easy. You must screen tenants, collect rent, deal with
complaints, keep your tenants happy, and so much more. That said, all of these tasks can take a toll on
any landlord, especially those who would rather not deal with stressful property management tasks.
* Staying Organized – Landlords deal with lots of paperwork. Therefore, if you are not careful, that
paperwork can quickly become disorganized. Not only can this cause you daily stress, but you could also
find yourself in legal trouble if you lose an important document
ISSUE LOCALLY REGARDING ABOUT RENTAL

• One of the worst problems landlords face is having a vacant property. The most successful
landlords or property management firms have low vacancy rates. Not only does a vacancy mean
no rental income is coming in, but it is also actually costing money to advertise and prepare for
occupancy
• The role requires a high level of organisation and constant re-prioritising. Maintaining a
personal balance is also important – while being constantly on call might suit other people, it's
easy for a property manager to experience burnout and the role has a high turnover rate.

WHAT I LEARNED

Based on our research what I learned or what we learn are the