Income Yield
Definition of "Income yield"
Same as term capitalization rate: Also called cap rate or income yield. A useful way to compute the rate of return on a real estate investment. It equals the net operating income (NOI) for the first year divided by the total investment. That interest rate that, when applied to the earnings of an investment, determines its market value. The lower the cap rate, the higher the risk to the investor and the higher the asking price. Whether property is overpriced depends on the rate for similar property in the market. There are two drawbacks to this approach; it is based on only the first year's NOI, and it ignores the appreciation in property value.
Popular Real Estate Terms
The allocation method estimates the value of the property’s land by gathering information from comparable properties. The allocation method of estimating site value is ideal, however, ...
An increase in the price or market value of real estate. ...
Person or business that obtains mortgages for others by finding suitable lenders. The mortgage broker sometimes deals with collections and disbursements. Typically the mortgage broker ...
The maximum pre-approved amount that an individual or business can borrow without preparing a new credit request. It is a safety buffer in the event funds are needed for unexpected ...
Amount received when property is changed from one use to another. ...
The concept of a release can define various meanings in the financial and real estate business. Typically, it establishes a discharge or literal escape from a loan borrower's economic ...
Same as term cape cod colonial house: Early American style 1 1/2 story house with a steep gable roof covered with shingles. The bedrooms are on the first floor, but the attic is often ...
An unpreventable, overwhelming, and irresistible force. It is common to place a force majeure clause in a construction contract to indemnify a construction deadline in the event an act of ...
Place where real estate is situated. The geographic location of property affects its value. For example, real estate in a good neighborhood is worth more. ...
Have a question or comment?
We're here to help.