Financial management techniques used by residential property developers
| dc.contributor.author | Hall, John | |
| dc.contributor.author | Lowies, Braam | |
| dc.date.accessioned | 2016-06-13T13:16:07Z | |
| dc.date.available | 2016-06-13T13:16:07Z | |
| dc.date.issued | 2010 | |
| dc.description.abstract | English: Real estate development can be one of the largest contributors of wealth in society; and it plays a key role in determining the level of economic prosperity of individuals, business firms and the country. For residential property developers to be successful wealth creators, they have to do sound financial planning, make the right decisions and use prudent financial management techniques. These decisions involve numerous alternatives, of which only one may yield the ultimate benefits and create the most wealth. The objective of this article is to investigate which financial techniques and methods residential property developers apply in practice when they undertake capital structure decisions or determine their cost of capital, as well as the methods they use when they make capital budgeting decisions., Important relationships such as the sources of finance used by residential property developers and the capital structure they tend to choose were identified by means of statistical testing. The results showed relatively low costs for obtaining both debt and own funds. Developers tend to disregard techniques such as the net present value (NPV) and the internal rate of return (IRR), because these techniques are unfamiliar to them. The relevance and importance of promoting the study of finance among real estate practitioners and familiarising them with its decision-making techniques and methods was one of the main recommendations of this article. | en_ZA |
| dc.description.abstract | Afrikaans: Eiendomsontwikkeling kan een van die grootste bydraes tot welvaart in ’n gemeenskap maak, en dit speel ’n sleutelrol in die bepaling van die ekonomiese vooruitgang van individue, besighede en ’n land. Residensiële eiendomsontwikkelaars kan suksesvolle welvaartskeppers wees indien hulle goeie finansiële beplanning onderneem, die regte besluite neem en optimale finansiële bestuurstegnieke toepas. Hierdie besluite behels verskeie alternatiewe, waarvan slegs een die hoogste opbrengs mag lewer en die meeste welvaart kan skep. Die doelwit van hierdie artikel is om ondersoek in te stel na watter finansiële tegnieke residensiële eiendomsontwikkelaars in die praktyk aanwend wanneer hulle kapitaalstruktuurbesluite maak of hul koste van kapitaal bepaal, asook die metodes wat hulle toepas wanneer hulle kapitaalinvesteringsbesluite maak. Belangrike verwantskappe, soos die finansieringsbronne wat residensiële eiendomsontwikkelaars gebruik en die kapitaalstrukture wat hulle geneig is om te kies, is afgelei deur middel van statistiese toetsing. Die resultate toon lae kostes in die verkryging van beide skuld en eie kapitaal. Residensiële eiendomsontwikkelaars is geneig om tegnieke soos die netto huidige waarde (NPV) en die interne opbrengskoers (IRR) te ignoreer omdat hulle nie daarmee vertroud is nie. Een van die hoofaanbevelings van hierdie artikel is dan ook die toepaslikheid en belangrikheid daarvan om die studie van finansies onder eiendomspraktisyns te bevorder, en om hulle meer vertroud met finansiële besluitnemingstegnieke en metodes te maak. | af |
| dc.description.version | Publisher's version | en_ZA |
| dc.identifier.citation | Lowies, G. A., & Hall, J. H. (2010). Financial management techniques used by residential property developers. Acta Structilia, 17(1), 62-78. | en_ZA |
| dc.identifier.issn | 1023-0564 (print) | |
| dc.identifier.issn | 2415-0487 (online) | |
| dc.identifier.uri | http://hdl.handle.net/11660/2819 | |
| dc.language.iso | en | en_ZA |
| dc.publisher | University of the Free State | en_ZA |
| dc.rights.holder | University of the Free State | en_ZA |
| dc.subject | Capital asset pricing model | en_ZA |
| dc.subject | Capital structure | en_ZA |
| dc.subject | Cost of debt | en_ZA |
| dc.subject | Cost of equity | en_ZA |
| dc.subject | Dividend discount model | en_ZA |
| dc.subject | Internal rate of return | en_ZA |
| dc.subject | Net present value | en_ZA |
| dc.subject | Residential property development | en_US |
| dc.subject | Weighted average cost of capital | en_ZA |
| dc.title | Financial management techniques used by residential property developers | en_ZA |
| dc.type | Article | en_ZA |