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
To understand what liquidity risk entails, first, we must investigate what liquidity means. On the one hand, it refers to an individual or company’s capacity to meet debts without ...
(1) Return of the principal invested in real estate. It excludes income earned. (2) Collection of a previously written off bad debt. ...
Dehydrated gypsum that is mixed with water to form a rapidly setting material. Plaster of paris sets too rapidly to be practical for most building applications, but it is useful for ...
Underground pit or tank used to store sewage. ...
An individual's bringing a legal action against a defendant. The plaintiff wants relief from the judge against a defendant. An example is investors in a real estate investment trust (REIT) ...
Also called straight bankruptcy. A provision of the 1978 bankruptcy Reform Act providing for a persons property to be divided among creditors to satisfy his/her unpaid debts. Any debtor ...
Easement to build, maintain, and operate a disposal line for sewage. ...
An offset statement defines a specific property owner’s underwritten certificate against their property. The reason behind this action is to set forth the current condition of liens ...
Also called all inclusive trust deed (AITD). A mortgage (trust deed) that encompasses existing mortgages and is subordinate to them. The existing mortgages stay on the property and the new ...
Have a question or comment?
We're here to help.