Knowledge Base
Glossary
23 terms you will come across with US real estate and in our documents. Briefly explained, from A to Z.
- Cap rate
- Capitalisation rate. A year’s net rental income relative to the purchase price. A metric for comparing properties, not a promise of returns.
- Cash flow
- The money flowing from a property: rental income minus costs such as management, maintenance, insurance, taxes and debt service.
- Currency risk
- The risk that the value of an investment in a foreign currency changes due to exchange rate movements. At STATELY: the US dollar against the euro or Swiss franc.
- Due diligence
- The careful review of a property before purchase: condition, leases, legal position, financing and figures.
- Escrow
- A trust account used in the USA to settle purchase prices, taxes or insurance. A neutral third party only releases the money once the conditions are met.
- Financial instrument
- The legal umbrella term for investments such as bonds or participations. This is what our legal texts call your investment. The product terms set out which rights it grants.
- FMA
- Financial Market Authority Liechtenstein. Approval of a prospectus by the FMA is not a recommendation and not a guarantee.
- Foreclosure
- The forced sale of a property in the USA when a secured loan is not serviced. The proceeds go to the secured creditor first.
- Issuer
- The term used in the legal texts for the company that issues the investment and is obliged to pay. At STATELY this is STATELY AG.
- Issuer risk
- The risk that STATELY AG cannot make its payments.
- Key information document
- A standardised short document on the costs, risks and workings of a financial product for retail investors (PRIIPs). It is provided before the investment where required.
- Limited recourse
- Claims are limited to the funds allocated to the respective product. The remaining assets of STATELY AG are not liable.
- Liquidity
- How quickly an investment can be turned into money at a fair price. Without a secondary market, a sale before the end of the term may not be possible.
- Nominal amount
- The amount you have invested, to which interest and repayment refer.
- PoC
- Proof of concept. This is what our legal texts call the first, deliberately limited phase of the platform.
- Property management
- The local management of the property: letting, tenant contact, repairs and accounting.
- Refinancing
- Replacing an existing loan with a new one. At the end of the term, repayment may require a refinancing.
- Secondary market
- A market on which investors buy and sell existing positions among themselves. At present there is none.
- Security in rem
- A right in the asset itself, such as a mortgage. Investors with STATELY have no security in rem over the property.
- Senior mortgage
- A bank’s senior mortgage loan on a US property. In a default, this creditor is paid first.
- Title insurance
- Insurance customary in the USA against defects in the title, such as unknown encumbrances or errors in the chain of ownership.
- Vacancy
- Time in which a unit is not let and brings in no rent. The vacancy rate measures the share of empty units.
- Withholding tax
- Tax deducted directly at source before a payment reaches the recipient. The amount depends on the country, the structure and the investor’s status.
The explanations are for general understanding. Only the product documents and the risk warnings are binding.
