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BAC 414: Real Estate Finance Notes

Institution: University

Course: Bachelor of Commerce

Posted By: chobotiso

Document Type: PDF

Number of Pages: 42

Price: KES 200
    
    

Views: 71     Downloads: 1

Summary

TOPIC 1: AN INTRODUCTION TO REAL ESTATE FINANCE
A. Definition of Key Terms
Real Estate – The physical land and improvements constructed on the land.
Real Estate Property – The ownership rights associated with the real estate.
Real Estate Finance – The purchasing, ownership, management, rental or sale of real estate for
profit.
B. Types of Real Estate
1. Estates in Possession – This is a present estate in land. Examples: Freehold Estate and
Leasehold Estate.
2. Estates not in Possession – This is a future estate in land. Examples include: Reversion and
Remainder.
C. Characteristics of Real Estate
-Durable
-Immobile
-Illiquid
-High transaction costs
-Heterogeneous
D. Property Rights
-It is a comprehensive collection of legal rights on a given property.
-It refers to a bundle of entitlements defining an owner’s rights, privileges and limitations to the
use of a property.
E. Characteristics of Property Rights
1. They are transferable E.g. from one counterparty to another.
2. Involves a distinction between ownership and possession. E.g. Leasing,
3. Property is usually non-human.
......


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