After-tax cash flow refers to the net cash flow generated by an income-producing property after accounting for income taxes and tax savings from allowable deductions. This measurement provides a true picture of an investor's profitability from real estate holding.
Cash throw-off, often referred to as cash flow, is a crucial metric in real estate investment that indicates the amount of cash generated by a property after all operating expenses and debt service have been paid. It is a measure of the income-producing ability of a property.
Commercial property refers to buildings or land intended to generate a profit, either from capital gain or rental income. This category includes a diverse array of properties such as shopping centers, office buildings, hotels, resorts, and restaurants.
Depletion refers to a non-cash deduction that accounts for the reduction in value of an income-generating natural resource, such as minerals, oil, gas, or timber.
Effective Gross Income (EGI) for income-producing property is the potential gross income minus a vacancy and collection allowance, plus miscellaneous income.
A nondisturbance clause in a real estate contract ensures that a tenant's lease will continue even if the property owner faces foreclosure, or that surface development will not be impeded by subsurface mineral rights.
Proprietorship refers to the ownership of a business, including income-producing real estate, by an individual, as opposed to a partnership or corporation. This ownership structure allows for direct control of property and income but comes with specific risks and benefits.
A tax shelter is an investment strategy that provides tax advantages by generating more after-tax income compared to before-tax income. These investments can produce before-tax cash flow while creating tax losses that can shield income from other sources from taxation.
