Capital Recovery refers to the process by which an investor recoups the initial investment in a real estate or business venture. This is typically achieved through revenue generation, cash flows, or sale of the asset. Understanding capital recovery is crucial for assessing the viability and profitability of investments.
The equity yield rate is the rate of return on the equity portion of an investment, taking into account periodic cash flow and the proceeds from resale. It considers the timing and amounts of cash flow after annual debt service, but not income taxes.
Negative leverage, also known as reverse leverage, occurs when the cost of borrowing exceeds the income generated by an investment, resulting in a lower overall return.
In real estate, 'Rate' refers to the ratio of periodic income or change to the amount invested or initial amount. This metric is used in various contexts such as calculating interest on loans, investment returns, population growth, and occupancy in buildings.
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