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
Expected selling price of property less costs to sell. It is the net amount received upon the sale of property. gross receivables less allowance for doubtful accounts, representing the ...
Member of a partnership whose liability for partnership debts is limited to the amount invested in the partnership. A limited partner is prohibited from taking active part in the management ...
A right or interest in property held by a third party, which often limits the use and diminishes the value of the property, but usually does not prevent the transferring of title. The more ...
The term effective interest rate is the actual return from a savings account or any investment where you pay interest when considering the effects of compounding costs over time. Through an ...
If you came here looking for the Sublease definition, chances are that you know what it means, but you need more information about it, with scenarios and facts to better grasp it. ...
An income feature added to a mortgage whereby the mortgagee earns income in addition to the mortgage interest and principal payments. Also called an equity kicker, a kicker allows the ...
Six-mile-wide column of land running north-south in rectangular survey system ...
Tax deduction permitted upon the transfer of property from one spouse to another. The deduction is allowed under the federal gift tax for lifetime transfers or under the federal estate tax ...
Gets rid of unwanted substances and materials from a residence or office building. Waste includes solids and liquids, hazardous and nonhazardous materials. ...
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