KNOWLEDGE BASE

Investment and Wealth Glossary

Essential terminology for understanding stock markets, savings, banking and real estate investment, and making informed wealth decisions.

8 terms defined

8 terms displayed

Real Estate Investment

Amount directly funded by the buyer when purchasing a property, in addition to any mortgage financing.

Practical Example: The buyer contributes 20% of the price and finances the remainder with a loan.

Real Estate Investment

Rental yield calculated after deducting expenses, fees, taxes and vacancy periods borne by the owner.

Practical Example: Net yield is lower than gross yield once annual expenses are included.

Real Estate Investment

Positive difference between a property's selling price and its acquisition cost adjusted for eligible fees and improvements.

Practical Example: A property bought for FCFA 20 million and sold for FCFA 25 million generates a FCFA 5 million gross capital gain.

Real Estate Investment

Periodic balance remaining after rent is collected and loan payments, expenses, taxes and property costs are paid.

Practical Example: Cash flow is positive when rental income exceeds all property-related outflows.

Real Estate Investment

Use of debt to acquire an asset worth more than the equity invested, potentially amplifying both gains and losses.

Practical Example: An investor contributes limited equity and finances the rest of the property with a loan.

Real Estate Investment

Land, housing, commercial premises or a building held for use, rental income or future appreciation.

Practical Example: An apartment purchased for rental is a real estate investment property.

Real Estate Investment

Period during which a rental property generates no rent because it has no occupant.

Practical Example: Two months without a tenant reduce annual income and the property's actual return.

Real Estate Investment

Annual rental income divided by a property's purchase price or value, expressed as a percentage.

Practical Example: FCFA 600,000 in annual rent on a FCFA 10,000,000 property represents a 6% gross yield.