Builtup Method

Definition of "Built-up method"

Approach to determining a capitalization rate for use in valuating property so as to arrive at a suitable purchase price. To the risk free interest rate is added a risk premium to cover the greater risk. If the risk free rate is 6% and a risk premium of 35 is necessary to compensate for the properties poor liquidity, the built-up total capitalization rate would be 9%.

Search Real Estate Glossary

Related Real Estate Glossary terms

Armstrong Investigation

Inquiry conducted by a committee of the legislature of the State of New York in 1905 that looked at ...

Basic Limit

Minimum amount of coverage for which a company will write a liability insurance policy. ...

Advance Premium

Premium paid before the due date. For example, a premium is due on July 1, 2000, but the insured act ...

Delinquency

Being behind in a payment on a tax or debt when due (on the due date of payment or before the grace ...

Mortality Table

Chart showing rate of death at each age in terms of number of deaths per thousand. ...

Beveled Siding

See clapboard. ...

Related Real Estate FAQ

What Is A Principal?

Principal is the amount of money borrowed and still owed on a loan not including the interest. ...

What Is An Index?

An index is an economic indicator used to set the rate for adjustable-rate mortgages. ...

What Is A Proprietary Lease?

A proprietary lease is lease used for co-ops that give the shareowners the right to live in a partic ...

What Is An APR And What Does It Include?

An APR stands for an ANNUAL PERCENTAGE RATE. This rate includes the costs of any points paid, mortga ...

What Is A Point?

A point is equal to 1 percent of a loan amount. Lenders charge points in exchange for lowering the i ...

What Is A Credit Report?

A credit report is a report of all your debt information compiled by an independent agency. The cred ...

Read why Real Estate Agent rates 5 Stars in 10 Agent Reviews

Agents join here

Add our widget on your Website

Real Estate Advice

How is Square Footage Determined? 5 signs of house foundation problems Why Use a Real Estate Agent? Home Prices - The Extra Costs Top Five Reasons Your Home Offer was Rejected

FAQ

What is an easement? How much money can I borrow to buy a home? What is a Multiple Listing Service (MLS)? What is a spec house? What is a front-end ratio?