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
Assures that the title is free of any legal claims including encumbrances. It includes covenants of seizin, freedom from encumbrance, express warranties of title, right to quiet enjoyment, ...
Written agreement between two or more parties to extend the terms of a document. ...
Unexpected increase in the price of property not due to any effort on the owner's part. An example is when the appraised value of a house increases because of a population increase in the ...
Modification made by a municipality to the zoning of a locality. A change in zoning typically has to be requested and approved by a zoning commission and then the legislative body. It can ...
Sewer system built into the streets of a neighborhood that is capable of accommodating the excess water flow of a heavy storm without backing up or flooding. ...
A municipal or county local government board that resolves zoning disputes. ...
Individuals who are legally entitled to inherit money and property when someone dies. ...
The interest rate charged for a loan. For example, John obtained a $10.000 loan from the bank charging 10% interest. ...
An early term used to describe all types of real estate property, improvements to the land, and all rights accruing to the land. ...
Have a question or comment?
We're here to help.