R – Compendium of Real Estate Terms & Concepts

Primary Functions of Insurance a. Risk transfer: Insurance is a risk transfer mechanism, whereby the individual or the business enterprise can shift some of the uncertainty of life on to the shoulders of others in return for a known premium, usually a very small amount compared with the potential loss;

Risk can be defined as “the probability of an unwanted outcome happening”. Risk assessment should be viewed in the overall context of risk management and seen as one of the three key activities – risk analysis, risk assessment and risk mitigation - which facilitate the taking of decisions and actions…

A lease may be created so as to take effect either immediately or at some date in the future. If it is in to take place in the future, it is known as reversionary lease. However, there is a rule called a rule against perpetuity which requires that any future…

Return on capital measures a 'rate of return'. The main reason leading someone to an investment is making of profit. We however need to understand the meaning of the word “investment” to understand this term.

Return of capital (ROC) refers to payments back to "capital owners" (shareholders, partners, unit-holders) that exceed the growth (net income/taxable income) of a business. Investment involves the laying down of capital, which will be used to generate more income as it is being used up.

Residual value is the estimated net amount that will be received when the asset is removed from service. Residual value is defined as “the net amount that the entity expects to obtain for an asset at the end of its useful life after deducting the costs of disposal, to the…

Companies may solicit proposals from other companies through RFPs. RFP is a type of bidding solicitation in which a company or organisation announces that funding is available for a particular project or program, and companies can place bids for the project's completion. In other words, RFP is a solicitation, often…

Reproduction cost new is the current cost of reproducing a new replica of a property with the same or closely similar materials.

Reproduction cost is defined as: the cost, including material, labour, and overhead, that would be incurred in constructing an improvement having exactly the same characteristics as the original improvement. Ifediora (1993) defines reproduction as the cost of creating a replica building (considering a building here) or...

A report may be defined as a written document in which specific and objective research based information upon which a course of action or decision is taken. It could also be defined as a comprehensive account of an executed job, a consideration of an investigation from a writer to an…