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
Rights granted to owners of property restricted to conservation use, historic preservation, or some other low density function to sell to other landowners allowing them to develop their ...
Administrator of estate is a term used in common-law jurisdiction for a person assigned a particular responsibility. The administrator of estate definition describes a court-appointed ...
Divider made of plasterboard or plaster used to partition rooms. A room is created by the walls surrounding it. ...
Contracts: Awarding a contract to the bidder for the property with the best offer. Lease: To lease property to a lessee. ...
Expenditure to make a specific security or real estate transaction. Real estate transaction costs include survey costs, mortgage points and origination fees, recording fees, state transfer ...
The American Society of Appraisers, also referred to as ASA, is the largest voluntary membership, a multi-discipline trade association that stands for and promotes its appraiser members. ...
The interest rate and terms competing mortgage lenders are offering to potential mortgagees. The mortgage market is competitive on the basis of mortgage interest rates, points, credit ...
Legal obligation to pay taxes associated with owning property or earning income. For example, a real estate owner must pay property taxes. ...
Also called financial leverage. The use of borrower funds to magnify return. Trading profitably on the equity, also called favorable financial leverage, means that the borrowed funds ...
Have a question or comment?
We're here to help.