A AAA-Tenant, also referred to as a Triple-A Tenant, is a highly creditworthy and dependable tenant that typically includes large, established corporations or government entities. These tenants are deemed exceptionally low risk for defaulting on lease payments, making them highly desirable for property owners and investors.
Debt service refers to the periodic payments, typically consisting of both principal and interest, made on a loan. It is a crucial concept in real estate finance and investment, as it impacts cash flow, profitability, and overall financial health of a property or investment.
Depreciable real estate refers to property used in a trade or business or for investment purposes that is subject to depreciation deductions under Section 167 of the Internal Revenue Code. This typically includes both residential and commercial properties, excluding the value of the land.
Depreciation, in real estate appraisal, refers to the reduction in a property's value due to wear and tear, age, or other factors, which impacts its overall market value.
A Four-Plex is a type of residential building configuration that contains four separate dwelling units. It offers opportunities for both living in one unit and renting out the others or renting all four units for income.
The Going-In Cap Rate, also known as the entry cap rate, is the ratio of the initial year's Net Operating Income (NOI) to the acquisition price of an investment property. This key metric helps investors assess the initial yield they can expect from a real estate investment.
Gross Possible Rent (GPR), also known as Potential Gross Income (PGI), represents the maximum rental income a property could generate if it were entirely occupied year-round with zero vacancies.
A handyman’s special is a term used in real estate classified advertising, which generally refers to a house needing extensive repairs and remodeling, sold at a relatively low price. It offers potential for profit if the buyer can perform the necessary upgrades.
Investment properties are real estate assets purchased with the intention of earning a return on investment. This can be through rental income, the future resale of the property, or both.
A multiple exchange is a tax-free exchange in which more than one property or more than two parties are involved. This type of exchange allows for a series of transactions that enable parties to swap properties or interests to achieve their desired outcomes without generating a taxable event.
Section 1221 of the Internal Revenue Code specifies what does not constitute a capital asset, crucial for determining tax treatment of different assets.
Section 167 is the part of the Internal Revenue Code (IRC) that deals with depreciation for property, including real estate. This section provides guidelines for the allowance of depreciation deductions for tax purposes.
A Starker Transaction, also known as a delayed tax-free exchange, is a method used in real estate to defer the payment of capital gains tax on the sale of an investment property by using the proceeds to purchase a like-kind property.
A Tax-Free Exchange, also known as a Tax-Deferred Exchange, is a real estate transaction that allows investors to defer capital gains taxes on the sale of an investment property by purchasing a similar property under IRS Section 1031.
