Fundamental Terms in Real Estate Investment

Personal Property-Property that is not permanently attached to real estate. Appliances are personal property.

Home Property-Real estate designed and meant as dwellings, including single- plus multifamily homes, but not hotels or motels.

Mortgage-A lien against a property that secures a mortgage loan or note.

Adjustable Rate Mortgage (ARM)-A mortgage loan in which the interest rate is not constant over the life of the loan, yet is adjusted periodically according to the predetermined formula or index.

Principal-The amount of a loan, exclusive of any attention.

Balloon-A provision in a loan that needs the principal balance to be paid off in the lump sum before the loan would be upon the market through normal amortization.
If you cherished this posting and you would like to acquire much more facts with regards to box brownie australia kindly go to our own web site.

Consumer Cost Index (CPI)-An index published with the U. S. Bureau of Labor Statistics and widely used as a measure of inflation. The index estimates the price of buying a fixed group of goods and services plus compares that cost to the base year (1982) that was assigned an index value of 100. The CPI is commonly used in escalation clauses of economic real estate leases so that the rent created by those leases will keep speed with inflation. Also, cost-of-living catalog.

Equity-The difference between a property’s value and the balance of the debt against it.

FSBO-For Sale simply by Owner; pronounced “Fizzbo. ”

Revenue Approach-A method of real estate appraisal that takes a property’s project income flow and capitalizes it to estimate the value of the asset.

Inflation Rate-The annual rate at which a currency loses purchasing power.

Limited Responsibility Company (LLC)-A type of business enterprise that is taxed like a partnership (i. e., pass-through taxation) but that also provides the limited liability security of a corporation.

Straight-Line Depreciation-A depreciation method that allows the owner to write away from an asset’s basis in the same amounts over its useful existence.

Tax Shelter-An investment vehicle that can shield a part of an investor’s regular income from taxation.

Useful Life-The length of time, as specified in the taxes code, over which an asset may be depreciated. The Useful Life for taxes purposes is not necessarily the same as the exact physical life expectancy of a particular asset.

Leave a Reply

Your email address will not be published. Required fields are marked *