Investment Real Estate Key Terms
Adjusted basis- value of the property used to determined the amount of gain or loss realized by an owner upon the sale.
Appreciation- an increase in property value
Boot- cash received in a tax free exchange
Capital gain- the profit realized from the sale of real estate investments, assets such as stocks or collectibles.
Capital loss- occurs when investment or other types of property are sold at a lost
Cash flow- income produced by an investment property after deducting operating expenses and debt
Debt service- principal and interest payments on a debt
Gross income- income received with out subtracting expenses
Investment- the outlay of maney for prospective income or profit.
Leverage- the use of borrowed funds
Net Operating income- gross operating income minus operating expenses
Operating statement for a property - includes income, vacancy rates and expenses
proforma schedule- an operating statement adjusted to reflect a potential change in income and expenses
Rate or Return- percentage of net income produced by a property or other investment
rent roll- the number of rental units currently occupied in a building by the rental amount per unit
straight line depreciation- a type of income tax depreciation that allows investment property to be deducted in installments over a number of years
Tax depreciation- a provision of tax law permitting a property to take an ordinary business deduction for the amount of annual depreciation
Tax free echange- trading of like kind properties held as an investment or for use in business
When you are ready to buy or sell property in Brooklyn New York, feel free to
contact me at 917-861-9166.
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