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
Depressed, poorly kept locality that may include vacant businesses. It may be a high crime area. The people living in the area are typically poor and there may also be homeless people. ...
An antenuptial agreement is, as the terms composition states, an agreement that happens before the nuptials, or, in other words, the wedding. The antenuptial agreement is more commonly ...
Legal proceeding whereby a person's property is attached and used to pay an obligation. The employer may withhold part of the employee's salary to the court until the debt has been paid. ...
When a real estate owner wants to know what their property tax liability is, they calculate the assessment ratio for their property. An assessment ration is a relationship between a real ...
Blockbusting is a despicable and illegal racist business practice. Here’s how Blockbusting happens: a real estate agent, or someone posing as one, comes to a homeowner and instills ...
Time period for which one expects to keep property such as a real estate investment. ...
Warranties issued by contractors, sellers, and real estate agencies that protect home buyers from specified defects in a house as per the contract. ...
Lienholder's statement as to the unpaid balance on a trust deed note. ...
See estoppel. ...
Have a question or comment?
We're here to help.