Definition of "Capitalization"

Tarus Monroe real estate agent

Written by

Tarus Monroeelite badge icon

Ultima Realty

(1) Multiplying the average gross or net operating income of rental property by an appropriate factor to determine the value of the property. The capitalization rate depends on factors such as neighborhood, stability of rental payments, risk, quality of tenants, historical occupancy rate, etc. (2) To take advantage of something such as capitalizing on a buying opportunity of a house. (3) Charging expenditures made to an asset such as charging the cost of a house with a new roof. (4) Recording leased property as an asset.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Real Estate Terms

Any walls constructed without using concrete or mortar. Drywall materials include sheetrock, gypsum, plywood, Styrofoam, and pressed fiver. See also drywall construction. ...

An insect, such as a termite, that "eats into" the wood and destroys it. This can cause significant damage to the home. Most states have laws that require termite inspection and ...

Word, or group of words, that identifies a business or one of its products. The name is registered with U.S. Patent Office and provides legal protection for an indefinite number of renewals ...

Also called real property. Anything permanently affixed to the land, such as buildings, walls, fences, and shrubs, as well as the rights to own or use them. It is distinguished from ...

Projecting what the total cost would be to construct a structure. Costs include material, labor, and lawyers' fees. ...

Square footage of space a parcel of land has. ...

Geographical area for which a given governmental agency has authority and responsibility. For example, the jurisdiction of a county court is the county in which it is located. ...

Adding a period of time onto another. An examples a mortgagor who successfully restructures his loan by tacking another five years onto the term. ...

Exposure can have various meanings in real estate and insurance, depending on the context. Let’s have a thorough look at these scenarios! Exposure as property’s ...

Popular Real Estate Questions