A capitalization rate (Cap Rate) represents the rate of return expected to be generated on a real estate investment property. It helps in deriving the property's current market value or the potential return on investment.
A measure of annual cash return on the amount of cash invested in a property, often used to evaluate the performance of income-generating real estate.
The Debt Coverage Ratio (DCR) is a key metric used in real estate to assess the ability of an income-producing property to cover its annual debt payments. It helps lenders and investors evaluate the risk associated with a property loan.
A technique used in the appraisal of mortgaged income property to estimate its present value by discounting the future annual cash flow and expected resale proceeds.
Gross income represents the total income generated from property or other sources before any expenses or deductions are applied. It includes rental income, alimony, retirement benefits, and various other income streams.
Income Property refers to real estate that is specifically utilized to generate rental income. It encompasses a variety of property types that can provide steady income streams to the owner.
Multifamily housing represents residential structures containing more than one dwelling unit within the same building, designed to accommodate multiple households. These types of properties range from smaller multi-unit buildings like duplexes to larger apartment complexes.
Property management encompasses the oversight and operations necessary to maintain real estate properties, including rent collection, maintenance, and financial management.
RealtyRates.com is a web platform that offers quarterly updates of survey data on capitalization rates for various types of income properties, including investor and developer surveys.
Repairs refer to work performed to restore a property to its original condition without extending its useful life. This term is distinct from capital improvements, which add value or extend the life of the property. In the context of income property, repairs are considered an operating expense for accounting and tax purposes.
Stabilized Value refers to the valuation of a property after it has achieved a consistent occupancy rate and stable operating expenses, reflecting its true income-generating potential under normal market conditions.
A tax-deductible expense is a type of expenditure that can be subtracted from taxable income, thus reducing the amount of income that is taxed. This helps in lowering the overall tax liability for individuals and businesses.
The yield rate, also known as the return on investment, is a key metric used to evaluate the annual return generated from an investment property expressed as a percentage of its cost or market value.
