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

Dragnet Clause

Mortgage clause causing the mortgagor to pledge additional properties, mortgaged or not, as collater ...

Net Gain From Operations

Statutory accounting principles (SAP), as listed in the insurance company's annual financial stateme ...

Issued Business

Policies that have been sold to and paid for by an insured, but not yet delivered to the insured. ...

Reversionary Lease

Future rental agreement to start after the current rental arrangement expires. ...

Watercraft Nonowned Insurance

Endorsement to commercial general liability insurance (CGL) for a business responsible for boats it ...

Aggregate Stop Loss Insurance

Coverage that goes into effect when an employer who has self insurance has its total group health in ...

Related Real Estate FAQ

What Are Prepayment Penalties?

A penalty fee charged for paying off a mortgage early, thus allowing banks to still make money off o ...

What Is The APR For This ARM Loan?

This APR Calculator can be used to estimate the Annual Percentage Rate for a loan based on input par ...

What Is An Inspection?

An inspection is a close and thorough examination of a house and property. A licensed individual usu ...

When Should I Get Travel Insurance?

You should definitely consider getting travel insurance when doing or bringing any of the following ...

What Do I Need To Know About Term Life Insurance?

Provides financial protection for a limited, specified period of time, at a lower cost than permanen ...

What Is A Gated Community?

A gated community is a community of homes where you must pass through a security gate in order to en ...

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

Agents join here
Add our widget on your Website

Real Estate Advice

7 Things to Consider Before Moving to a New City How is Square Footage Determined? What is Earnest Money What is Hazard Insurance? How To Choose A Realtor

FAQ

What is an adjustable-rate mortgage (ARM)? What is a convertible ARM? What is a conventional mortgage? What happens when you prequalify? What is an assumable mortgage?