The 'Amount of One', also known as the 'Compound Amount of One', refers to the future value of a single unit of currency invested today at a specific interest rate over a given period.
Appreciation refers to the increase in the value of a property over time, driven by various factors including inflation, demand pressures, physical additions, and improvements. Appreciation can significantly impact investment returns and tax obligations.
A basement suite, also known as an accessory apartment, is a separate living area typically located in the basement of a single-family home. It usually includes sleeping, cooking, and bathroom facilities.
The Break-Even Point in real estate is the rental income or occupancy level necessary to cover all operating expenses and debt service, ensuring that the property does not operate at a loss.
Expenses in real estate represent the costs associated with acquiring, maintaining, and operating a property. These expenses can significantly impact the profitability of real estate investments and the overall management of properties.
Freehold refers to an interest in real estate without a predetermined time span, giving the holder indefinite ownership and rights to the property.
A Mortgage-Backed Security (MBS) is a type of asset-backed security that represents a claim on the cash flows from mortgage loans, primarily on residential property. These securities are created by pooling together various mortgage loans and then selling the subsequent payment streams to investors.
Net Operating Income (NOI) is a crucial metric in real estate investment that measures the profitability of a property or business after subtracting operating expenses but before interest and tax deductions. It serves as an indicator of the financial health and performance of income-generating real estate.
An occupancy report provides a comprehensive summary of a building's occupancy status, detailing pertinent information about tenants, vacant spaces, and leasing terms. This report is essential for property managers, owners, and investors to assess the property’s performance and make informed decisions.
A Real Estate Mortgage Investment Conduit (REMIC) is an entity used to pool mortgage loans and issue mortgage-backed securities, offering benefits such as tax advantages and liquidity to the mortgage market.
Rent Interruption Insurance, also known as Rental Income Insurance, provides compensation to rental property owners for the loss of rental income that occurs if the property becomes uninhabitable due to a covered peril like fire, storm, or vandalism.
Subdividing involves dividing a tract of land into smaller individual lots, which can then be sold separately or developed. The process of subdividing land typically involves planning, land surveying, zoning considerations, and obtaining the necessary permits.
Tenant Improvements, often abbreviated as TIs, refer to the customized alterations a building owner makes to rental space as part of a lease agreement to configure the space for the tenant's specific needs.
Terminal value represents the remaining value or expected remaining value of a property at the end of a certain period, such as an income projection period. It is an essential component in financial modeling and valuation, like Discounted Cash Flow (DCF) analysis, to determine the future worth of an asset.
Yield refers to the earnings generated and realized on an investment over a particular period of time, presented as a percentage of the investment's cost, current market value, or face value.
