Straight-line Recapture Rate
Definition of "Straight-line recapture rate"
Capitalization rate used to convert the expected income derived from a property into its estimated asset value. The estimated asset value may be computed by dividing the annual income generated by a property by its capitalization rate. The capitalization rate that is used is generally viewed as having two components: rate of return on investment and straight-line recapture rate that represents the percentage of cost that the investors believes that he or she must recover each year in order to recoup the entire cost of the asset over its useful life. For example, an investor decides that the capitalization rate for a particular piece of real estate is 15% consisting of a rate of return of 12% on his investment and a 3% straight-line recapture rate.
Popular Real Estate Terms
A forced sale or forced liquidation typically means an involuntary sale of valuables or property for financial reasons. If an unpredictable or uncontrollable event emerges, a seller must ...
Derogative term describing a high-pressure telemarketing office where sales personnel often use extremely exaggerated claims as well as intense sales practices to convince targets clients ...
Right of an individual to be offered something before it is offered to others. For example, a tenant whose apartment is going to be converted to a cooperative has the first right of ...
One who has committed a tort. A tort is a civil wrong that occurs as a result of a breach of legal duty owed to someone, e.g., negligence. A tort does not arise from a breach of contract. ...
A portion of a real estate company's assets financed with debt instead of equity. It involves interest an principal obligations. Financial leverage is beneficial to real estate investors ...
The largest financial intermediaries directly involved in the financing of real estate. Commercial banks act as lenders for a multitude of loans. While they occasionally provide financing ...
Sales commission charged to buy shares in a real estate mutual fund sold by a broker or salesperson. Typically, the fee ranges from about 1 percent to 8 percent of the initial investment. ...
maintenance procedures conducted to prevent later repairs and furthering a longer useful life. For example, many boilers and burners are cleaned and serviced each year before the winter ...
The amount of a periodic payment, whether monthly, quarterly, or annually, including interest and principal, required for a mortgage payment. ...
Have a question or comment?
We're here to help.