A bundle of rights in the real estate industry are the rights that a real estate owner enjoys. The rights are of ownership automatically transfers with the transfer of the title. This illustrates that when you buy a property, you get a bundle of rights with it. We’ll take a closer look at the uniqueness, rights of possession, fixtures, leasehold, real property, and the survey method.
THE BUNDLE OF RIGHTS ARE UNIQUE
It is very unique as each real estate property comes with a bundle of rights. For instance, most U.S. jurisdictions recognized the following rights: the right to sell; to lease; to acquire minerals, gas, oil, etc. and within the land the given bundle of rights are; right to use; to possess; right to develop; etc.
THE RIGHTS OF POSSESSION IN BUNDLE OF RIGHTS
The multiple rights are significant because owners of the real property can generally do what they choose with each right. For example, the owner could choose to keep all the rights but lease the right to drill for oil to an oil company. The owner can also choose to keep all the rights but lease the property to a tenant in a bundle of rights.
In other words, the owner can elect to keep, lease or sell the rights to the land.
THE FIXTURES ARE IN ACCORDANCE WITH TO BUNDLE OF RIGHTS
When a personal property item is attached to or is used with the land or its improvements in such a way that is legally considered a part of the real estate. When this change occurs, the personal property becomes automatically conveyed to the buyer along with the land.
Fixtures are also called improvements. Homes, garages, and buildings can be types of improvements. Manufactured homes can obtain a fixture document.
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THE LEASEHOLD IN TERMS OF BUNDLE OF RIGHTS
A lease agreement is a contract between two parties, the lessor and the lessee. The lessor is the legal owner of the asset; the lessee obtains the right to use the asset in return for rental payments. Although a tenant does hold real property rights, leasehold is considered personal property.
THE REAL ESTATE INVESTMENT OBJECTIVE
As an investment in markets where land and building prices are rising, real estate is often purchased as an investment, whether or not the owner intends to use the property.
Often investment properties are rented out, but “flipping” involves quickly reselling a property. Sometimes taking advantage of arbitrage or quickly rising value and sometimes after repairs are made that substantially raise the value of the property.
THE SURVEY METHOD IN BUNDLE OF RIGHTS
The Public Land Survey System (PLSS) is the surveying method developed and used in the United States to divide real property for sale and settling. The PLSS used nominally rectangular shapes to divide. The basic unit in the PLSS is the Section of land, typically 1-mile square. A 6 x 6-mile grid of landform sections is referred to as a township. Townships are laid out east and west of a Principal Meridian and north and south of a Baseline.
Finally, a property owner reserves the right not to exercise any of these rights. Simply because you have a right does not mean you must exercise it.
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