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
Raising money by mortgages and borrowing the money directly from financial institutions. The presence of debt financing provides financial leverage, which tends to magnify the effects of ...
The fee charged by a governmental jurisdiction to enter in the public record the deed and other documents affecting the title to property at the time of a transaction. ...
Individual: Adjusted gross income less itemized deductions and personal exemptions. After taxable income is computed, the tax to be paid can be determined by looking at the tax rate ...
Holding and controlling property. It includes not only custody but also having some legal right. An example is occupying real property and enjoying its benefits. ...
Cash flow before subtracting income taxes. ...
Direct line of descent as from father to son. An example of a lineal hereditament would be passing of the title of real property by virtue of a will to the first-born son. ...
Analysis of the risks and rewards to an individual in making a particular property investment. Investment analysis considers the cost of the original investment, the investment return over ...
Style of architecture originating at the German Bauhaus, or architectural institute, in the 1920's associated with the International School of architecture. The Bauhaus style emphasized ...
Tile placed on a wall as decoration, such as in a bathroom or kitchen. ...
Have a question or comment?
We're here to help.