NATURE OF REAL ESTATE OWNERSHIP – ALL YOU NEED TO KNOW
NATURE OF REAL ESTATE
Real estate constitutes an important part of the wealth of companies and individuals. As a result, the role of the corporate property manager has become critically important within the business. The property manager must be aware not only of the value of land for purchase and sale, but also of the proper negotiation of leases, tax policies and assessments, zoning and land use planning, and environmental laws.
Real property, also known as immovable property or immovable property, consists of any specified portion of land and anything permanently built on or under it. These are natural resources and/or man-made structures that include items above or below ground. Legally, owning a property requires all the rights transferred from the seller to the buyer when selling a property. Usually these rights control the use, transfer and/or sale of real property. These real estate rights include the rights of possession, exclusion, control, enjoyment and disposition.
Different forms of ownership, recognized by law, further describe the property rights associated with owning land. The form of ownership depends on the terms of the lease, bond, will, land grant and/or bill of sale from which the property was issued.
The real estate market is part of the general market. But dying to the following peculiarities of the real estate market, there is the gap between the relative return of investment in the corresponding markets:
Real estate can only be divided into small uniform sizes to a certain extent and potential buyers will either have to accept the sizes made available or leave the market. Thus, the number of potential buyers of a property will be inversely proportional to the amount of investment in the property. Thus, a large amount will be required for the purchase of a property compared to other properties. Therefore, potential buyers will usually need to raise substantial sums to achieve their ambitions.
There is no central market for real estate and transactions are usually done in private meetings, usually through real estate brokers or agents. In most cases, the price at which bargains are struck is known only to the buyer and seller. Therefore, there are chances of having different returns on similar real estate in different parts of the town or city. The absence of a central market for real estate leads to inadequate information and imperfect knowledge of potential investors in real estate. Thus, the real estate market is an imperfect market.
The purchase of real estate involves the transfer of the rights attached to it and therefore qualified solicitors will need to be appointed to invest in the title of the real estate and issue the necessary clearance certificate. Thus, the process of establishing proof of ownership is sometimes expensive, difficult and time-consuming.
Many properties have multiple interests that exist in them and each of these interests is capable of being transferred. Mere possession of a property may not indicate its ownership as it is not possible to transport a property from one place to another
Studying the legal history of the property concerned reveals the complexities involved and while in theory it seems possible to complete property transactions within days, but in practice this rarely happens due to the lack of ideal circumstances in any case. The transfer period in case of properties can stretch for weeks, months or even years. Section 55 of the Conveyancing Act 1882 deals with the law on the rights and responsibilities of the buyer and seller of immovable property.
The real estate market is significantly affected by various government actions specific to real estate such as the Town Planning Act, the Rent Limitation Act, etc. Such legislative measures have a considerable effect on the income and the value of the property.
To reduce the speculative nature of immovable property in urban areas, the Urban Land (Ceilings Regulations) Act 1976 was passed by the government and under this act the limit was set on the ownership of the urban area. Surplus land will be turned over to the government for the use of the weaker sections of society. The government can also put pressure on the real estate market through its tax policy, investment policy, bank rates, etc.
Each property will have its own characteristics and characteristics due to the heterogeneous nature of the property. It therefore becomes difficult to compare even two seemingly similar properties. This is probably the main feature of interest for the property.
If a row of identical houses is built, each house is located on a separate location. Similarly, in the case of multi-storey residential apartments or shopping malls, the original construction features may be the same. But as soon as the places are occupied, the owners can make certain additions, alternations or modifications according to their habits. Such a small difference may not be relevant in terms of the market, but in some cases it results in a considerable difference in the market values of two seemingly similar properties.
In general, the factors that influence the investment market also influence the real estate market. Therefore, if there is a trend of increasing yield in the general investment market, the same will also be reflected in the real estate market. It is only in exceptional circumstances that real estate market returns can be seen to move in the opposite direction to investment market returns. For example, if the government increases the interest rate and the investors are of the opinion that such an increase in the interest rate will lead to a commercial depression, it is likely that they will divert their supply funds to l purchase of real estate. .
It is a fact that real estate always has a tangible asset behind it and hence investors would be pleased to get a return on their excess funds in the form of rent. In such cases, the demand for real estate will increase and as a result, their prices will rise and yields will fall.
It should further be noted that the real estate market is so small compared to the general investment market that changing conditions in the real estate market will have a virtually negligible effect on the general investment market.
The property may belong concurrently to several co-owners and the share of each co-owner may be equal or unequal. At the same time, the share of each co-owner can either be divided with specific physical limits or undivided. It is generally accepted that condominium property is less attractive to potential investors than freehold property. It is therefore necessary to provide for a deduction percentage, varying according to the number of co-owners, in the final value of the property. The higher the number of co-owners, the higher the percentage of deduction for co-ownership.
In almost all cases, it will be necessary to employ an engineer or surveyor to ascertain the physical characteristics of the property. This will increase the cost of carrying real estate compared to other forms of investment.
Ownership normally lasts for many years. Therefore, compared to many other goods, property is durable. It is also found that in most cases, when the property deteriorates, the rate of appreciation of the land value on which it is based exceeds the rate of deterioration of the property. Therefore, the end result is that, although the building has deteriorated, the overall value of the land and the building remains the same, and in many cases increases over time. So, compared to other ways of investing, real estate offers good security for money over a long period of time.
Source of income:
Property can become a source of income. A person saves money and with the help of these savings he buys the property. If he rents the good, the rent he receives is the result and the reward of the original saving or of his action of sacrificing immediate consumption. Thus, real estate proves to be an attractive mode of investment for those who wish to save and constitute a source of regular income.
An estate is an interest in real property. Estates are of several types, but a generic difference is between estates of ownership and estates of possession. Fee simple estates and life estates are property estates, while leasehold interests are possessory. Among property domains, the main division is between current domains and future domains. The owner of a future domain has an interest that can be bought and sold and will mature into current possession at the end of a period of time, at the end of another’s life, or with the occurrence of a contingent event.