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 legal right of a widow to a portion of her deceased husbands real property. ...
Financing source for new real estate business or turnaround ventures that usually combine much risk with potential for high return. There are various stages of venture capital, such as ...
Rule within the Internal Revenue Code applicable to capital gains from selling real estate that has been depreciated for tax purposes. Most buildings must be depreciated using the ...
Provision at the end of a document, such as a will, wherein the witnesses sign that the instrument has been executed before them. This may be useful involving transfers of real estate. ...
The definition of an absentee owner is a property owner who does not reside on the property. An absentee can be an individual or a corporation with legal ownership over a property ...
The Federal Reserve Bank's regulation applying to the amount of credit that may be advanced by brokers and dealers to customers to buy securities. ...
Provision in an agreement in which its renewal is a matter of course at the end of its initial term. ...
Among other things. Inter alia is an ancient method of referring to statutes without reciting all of their provisions. ...
Deterioration in property resulting from its ordinary use and from the aging process. An examples an apartment building that physically deteriorates over the years. ...
Have a question or comment?
We're here to help.