REAL ESTATE CHAPTER 17 TERMS

  1. Appreciation
    an increase or rise in the value of property, goods, etc.
  2. Asset
    property owned by a person or company, regarded as having value and available to meet debts, commitments, or legacies.
  3. Basis
    the justification for or reasoning behind something.
  4. Capital gain/loss
    ___ ___ is an increase in the value of a capital asset (investment or real estate) that gives it a higher worth than the purchase price. The gain is not realized until the asset is sold. A capital gain may be short-term (one year or less) or long-term (more than one year) and must be claimed on income taxes.
  5. Cash flow
    the total amount of money being transferred into and out of a business, especially as affecting liquidity.
  6. Debt service
    ___ ___ is the cash that is required to cover the repayment of interest and principal on a debt for a particular period. ... This ratio helps to determine the borrower's ability to make debt service payments because it compares the company's net income to the amount of principal and interest the firm must pay.
  7. Equity
    Home ___ is the value of ownership built up in a home or property
  8. Going concern value
    ___ ___ value is the value of a company as an ongoing entity. This value differs from the value of a liquidated company's assets, because an ongoing operation has the ability to continue to earn profit, while a liquidated company does not.
  9. Goodwill
    ___ is an intangible asset that arises as a result of the acquisition of one company by another for a premium value. The value of a company's brand name, solid customer base, good customer relations, good employee relations and any patents or proprietary technology represent ___.
  10. Installment sale
    An ___ ___ is an option for someone selling property, for a gain, where at least one payment is scheduled to be received after the tax year in which the sale occurs.
  11. Leverage
    One of the greatest advantages of investing in real estate is your ability to use ___.  In finance, leverage is a general term for any technique to multiply gains and losses.  In real estate, leverage allows you to achieve a much higher return on investment than you could without it.  Real estate investing allows you to use ___ when you buy.  It allows you to use it when you operate.  And it allows you to use it across multiple tenants.  Using ___ in your real estate investments can have a big effect on your financial statement.
  12. Like-kind exchange
    under United States tax law, also known as a 1031 exchange, is a transaction or series of transactions that allows for the disposal of an asset and the acquisition of another replacement asset without generating a current tax liability from the sale of the first asset.
  13. Liquidity
    • -the availability of liquid assets to a market or company.
    • -liquid assets; cash.
    • -a high volume of activity in a market.
  14. Profit
    a financial gain, especially the difference between the amount earned and the amount spent in buying, operating, or producing something.
  15. Risk
    The possibility of financial loss occurring as the result of owing a real estate investment. Property ___ might arise from such things as liability, legal issues, partner problems that can force a sale, fire or theft, loss of rental income and purchasing property with an imperfect title.
  16. Tax shelter
    a financial arrangement made to avoid or minimize taxes.
  17. Taxable income
    ___ ___ is the amount of income used to calculate an individual's or a company's income tax due. ___ ___ is generally described as gross income or adjusted gross income minus any deductions or exemptions allowed in that tax year.
Author
mccullochhelen
ID
332052
Card Set
REAL ESTATE CHAPTER 17 TERMS
Description
CHAPTER 17 TERMS
Updated