#1
What is a cap rate in real estate finance?
The rate of return on a property based on its income
ExplanationRate of return derived from property income.
#2
What does ROI stand for in real estate investment?
Return on Investment
ExplanationMeasurement of investment profitability.
#3
What is 'depreciation' in real estate investment?
A reduction in property value over time
ExplanationDecline in property value with time.
#4
What is a '1031 exchange' in real estate?
A tax-deferred exchange of like-kind properties
ExplanationTax-deferred swap of similar properties.
#5
What is a 'REIT' in real estate investment?
Real Estate Investment Trust
ExplanationInvestment vehicle for real estate assets.
#6
What is 'cash flow' in real estate finance?
The net income generated by a property
ExplanationProperty's generated income after expenses.
#7
What is a 'rehabilitation' in real estate investment terminology?
Renovation or improvement of a property
ExplanationRevamping a property for enhancement.
#8
What is 'leverage' in real estate finance?
The use of borrowed funds to increase potential return
ExplanationUsing borrowed funds for amplified returns.
#9
What does 'IRR' stand for in real estate finance?
Internal Rate of Return
ExplanationMeasurement of investment's profitability.
#10
What is 'equity' in real estate?
The value of a property after deducting liabilities
ExplanationProperty value after debt deductions.
#11
What is 'due diligence' in real estate investment?
A thorough investigation of a property before purchase
ExplanationDetailed property investigation pre-purchase.
#12
What is 'amortization' in real estate finance?
The reduction of a loan over time through regular payments
ExplanationGradual loan repayment over time.
#13
What is a 'triple net lease' in commercial real estate?
A lease where the tenant pays rent plus property expenses
ExplanationTenant pays rent along with property costs.
#14
What is 'liquidity' in real estate investment?
The ease of converting property into cash
ExplanationHow quickly property can be converted to cash.
#15
What is 'gross rental income' in real estate?
The total income generated by a property before expenses
ExplanationTotal income from property before costs.
#16
What is 'passive income' in real estate?
Income earned without active involvement
ExplanationIncome without active effort.
#17
What is 'valuation' in real estate?
The assessment of a property's worth
ExplanationEvaluation of property's value.