Effective Annual Yield
Definition of "Effective annual yield"
Real rate of interest on a loan. It is the coupon rate divided by the net proceeds of the loan. Assume Sharon took out a $1,000,000, on year, 10% discounted loan to buy real estate. The effective interest rate equals: in this discount loan the proceeds received is only $900,000, which effectively increases the cost of the loan. The effective annual yield, also called the annual percentage yield (APY). Different kinds of investments have different compounding periods. For example, some banks pay interest quarterly. If an investor wants to compare investments with different compounding periods, she must place them on a common basis. It is used for this purpose and is computed as follows.
Popular Real Estate Terms
Space that is available to all tenants or owners, such as a courtyard, main entrance, elevator, and pool. ...
Retail businesses in the same locality having a parking lot servicing them. The center may contain a department store, small retailers, and restaurants. There may also be a movie theater. ...
The term annuity due is a contract that demands payment at the beginning of each period. The most common example of an annuity due in real estate is rent when we consider that most ...
Property that is unoccupied and thus not being used. It is usually raw land with no structure or improvements theron. ...
The gross operating income definition is the total income that a real estate development receives from rentals and services before any costs or expenses are subtracted. Gross operating ...
Doing business as, or DBA, means an official moniker for your enterprise or company. Regularly, a DBA is a state certificate serving as a registration name and issued under a ...
The Internal Revenue Code (IRC Sections 1034 and 121) providing that a person over age 55 can sell a principal residence at a gain and exclude once in a life time up to $125,000 of the gain ...
If you're involved in real estate, whether buying, selling, or investing, you might have come across the term "alluvium." It's not just a fancy word but an important concept. Let's delve ...
A mortgage loan is nothing more than a real estate debt instrument. Acquiring a mortgage loan is the most common method of financing a home in America. The benefits are tremendous and ...
Have a question or comment?
We're here to help.