The amount of money left for the investor after all obligations of a real estate transaction, including personal income taxes on the transaction.
An employee is an individual who works for an employer who dictates not only what tasks the individual performs but also how those tasks are accomplished. Employers are usually responsible for paying Social Security taxes, withholding income taxes, and providing any obligatory employee benefits.
Holding costs, also known as carrying costs, are the expenses incurred by owning and maintaining a property over a period of time until it is sold or put to productive use.
A 'levy' refers to the legal imposition, assessment, or collection of charges such as taxes, fines, or other financial obligations. When an authority such as a government or court mandates a collection, it is termed a levy.
A lien is a legal claim or right against a property that is used as security for the payment of a debt, judgment, mortgage, or taxes. It serves as an encumbrance and imposes restrictions on transferring the property until the debt is satisfied.
A Net Lease is a type of lease agreement where the tenant agrees to pay not only the base rent but also additional costs associated with the property, such as taxes, insurance, and maintenance. This arrangement ensures that the landlord's rent receipt is 'net' of these expenses.
Ordinary income refers to any type of income that is taxed according to the standard income tax rates established by taxing authorities. This category includes wages, salaries, commissions, interest, and other types of income that do not receive special tax treatment like long-term capital gains.
A partnership is an agreement between two or more entities to enter into a business or investment together, where each partner may bind the other within the scope of their arrangement, and all partners share liability for the partnership's debts.
Principal, Interest, Taxes, and Insurance (PITI) are the four components typically included in a single monthly mortgage payment on an amortizing loan.
A real estate property tax deduction allows homeowners to reduce their taxable income by the amount they pay in property taxes. This deduction can be claimed on an individual's federal income tax return under itemized deductions.
Spendable Income refers to the amount of cash flow that property owners receive after all operating expenses, mortgage payments, and taxes have been deducted.
