The Real Estate
Encyclopedia: A-E

In real estate investing, cash flow refers to the actual amount of money an investor receives from a property after all operating expenses and debt service have been deducted from the gross income. Operating expenses may include items such as maintenance, property...

In real estate valuation, the capitalization rate, or cap rate, is the percentage used to convert a property’s net operating income into an estimate of its market value through the process of capitalization. It represents the rate of return an average investor would...

In real estate valuation, capitalization is a method used to estimate the present value of an income-producing property by converting its anticipated net income into an indication of value. This is done by dividing the property’s annual net operating income by a...

In real estate and tax contexts, capital gains refer to the profit realized from the sale or exchange of a capital asset, such as investment property or land, when the selling price exceeds the asset’s adjusted cost basis. The gain is generally calculated as the...

In real estate and tax law, a capital asset generally refers to property of a permanent or long-term nature that is used in the production of income or held for investment, such as land, buildings, and certain types of equipment. These assets are not primarily held...

In real estate financing, a cap refers to the limit placed on how much the interest rate on an adjustable-rate mortgage (ARM) may increase. Caps are designed to protect borrowers from sudden or excessive payment increases by restricting rate adjustments over specific...

In real estate contracts, a cancellation clause is a provision that outlines the specific circumstances and procedures under which one or both parties may terminate the agreement before its scheduled expiration. This clause typically identifies permissible reasons for...

In real estate, CC&R’s stands for covenants, conditions, and restrictions. CC&Rs are a set of legally binding rules that govern the use, appearance, and maintenance of property within a subdivision, planned development, or other common-interest community....

In real estate, a buyer’s market is a market condition in which supply exceeds demand, meaning there are more properties available for sale than there are active buyers. This imbalance typically gives buyers greater negotiating power, allowing them to secure lower...

In real estate financing, a buydown refers to a payment made to a lender (often by the buyer, seller, or builder) to reduce the interest rate on a mortgage loan. This payment is typically made upfront at closing in the form of discount points, with the goal of...