Title: A Note on the Effect of Transaction Costs on Real Estate Investment Returns
Abstract: In this paper we develop a model that demonstrates the effect of transaction costs on measuring returns to real estate. Our model reveals that studies not adjusting for transaction costs will overstate risk-adjusted returns. Accordingly, at least part of the reported mean-variance superiority of real estate over investments in corporate or government securities may be due to failing to consider transaction costs. We also illustrate the extent to which the inclusion of transaction costs equalizes mean-variance for investments in real estate and securities.
Publication Year: 1991
Publication Date: 1991-01-01
Language: en
Type: article
Indexed In: ['crossref']
Access and Citation
Cited By Count: 7
AI Researcher Chatbot
Get quick answers to your questions about the article from our AI researcher chatbot