Before-tax cash flow refers to the amount of cash that a property generates before income taxes are deducted. This figure is critical for evaluating the performance of real estate investments and comparing different investment properties.
Cash Flow Analysis assesses the inflows and outflows of cash in a business or investment over a specific period, aiding in financial strategy and decision-making.
Cash-on-cash return (CoC return) is a rate of return commonly used in real estate transactions that calculates the cash income earned on the cash invested in a property.
Discounted Cash Flow (DCF) is a financial valuation method used to determine the value of an investment based on its expected future cash flows, which are discounted to reflect their present value. This technique takes into account the time value of money.
EBITDA is a measure of a company's overall financial performance and is used as an alternative to earnings or net income in some circumstances. It strips out potentially non-operating and non-cash factors like interest, taxes, depreciation, and amortization.
The Internal Rate of Return (IRR) is a financial metric used to evaluate the profitability of potential investments or compare the expected profitability of different investments. It is the discount rate that makes the net present value (NPV) of all cash flows equal to zero in a discounted cash flow analysis.
The Present Value of Annuity (PVA) represents the current value of a series of future equal payments, discounted at a specific interest rate, over a set period.
Split-Rate Capitalization is a technique in real estate appraisal to estimate property value by using different capitalization rates for different periods, typically to account for varying degrees of risk and return over time.
Vacancy rate represents the percentage of all available units or space that are vacant or not rented in a particular property, influencing projected income and financial planning.
