Debt Financing
Raising money by mortgages and borrowing the money directly from financial institutions. The presence of debt financing provides financial leverage, which tends to magnify the effects of increased operating profits on the individual and corporation's returns. Interest is tax deductible. Further, leverage is desirable as long as the borrowed funds produce a return in excess of their cost. However, to much debt can result in higher levels of financial risk in meeting the principal and satisfying interest payments. Excessive debt will make it more difficult to raise funds and will increase further borrowing costs.
Popular Real Estate Terms
Capitalization rate used to convert the expected income derived from a property into its estimated asset value. The estimated asset value may be computed by dividing the annual income ...
One-time charge assessed by a bank or other financial institution at the closing of buying real property. The fee increases the effective cost to the borrower. One discount point translates ...
Marketable title that is free of encumbrances and disputed interests. Clear title is essential in order to convey a general warranty deed in a transaction. ...
Projecting what the total cost would be to construct a structure. Costs include material, labor, and lawyers' fees. ...
In real estate, Attractive Nuisance is how insurance companies classify something that is inherently dangerous and particularly enticing to children. A hazard located within a property that ...
A zero lot line is a term in residential real estate that refers to houses that are either very close to or at the edge of the property line. These houses are also called zero lot line ...
A legal procedure to sell a mortgage property to the highest bidder in order to satisfy a mortgage claim from a mortgagee against the value o the property. A foreclosure sale can occur from ...
Storage of inactive items, including automobiles, for a certain period. Normally, a storage facility, charging a fee, provides dead storage of items. To prevent deterioration, dead ...
Special tax incentive for the continued use and rehabilitation of historical buildings and old structures in an effort to arrest urban decay. Developers receive a credit based on a ...
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