Our guide to real estate, investing, strategies, and everything in-between.
What is the capitalization rate? Definition: The capitalization rate, also known as cap rate, is a term used to describe the expected rate of return on a real estate investment property. The most significant element to understand when it comes to capitalization rates is that real estate investors use cap rates to help determine whether they …
What is depreciation? Depreciation is a decrease in an asset’s value caused by wear and tear, age, or changes in the market. There are two primary ways in which depreciation is commonly understood. The first way is a method for investors to write off certain taxes, and the second way is the process by which …
What is a contingency? When it comes to real estate, a contingency is a clause in the purchase agreement that details actions and/or requirements to be met before the contract can become legally binding. The buyer and seller have to agree to the terms of all contingencies and sign off on them before the contract is …
What is yield? If you want to invest in real estate, you need to know about yield. It’s the term for the annual income generated by one of your investment properties. Yield is a percentage of the total amount an investment costs or its current value. Why is yield important? Because it measures the future …
What is it: Closing costs are the costs and fees charged to complete a real estate transaction. As the name might imply, the fees are due at closing, which is the finish line of a real estate purchase where ownership changes hands. The buyer is usually responsible for paying closing costs, but depending on the …
As the world evolves and becomes increasingly digitized, investing is changing too. Real estate tokenization and fractional real estate investing are two fairly new investment strategies that leverage new technology. What is real estate tokenization? Tokenization in real estate refers to converting real estate assets into tokens on the blockchain and putting them up for sale. …
Real Estate Tokenization vs. Fractionalization: Which One is Best for Me? Read More »
What is DTCC? The Depository Trust and Clearing Corporation (DTCC) is a U.S.-based financial services company focused on providing clearing and settlement services. It accepts deposits from more than 65 countries. The DTCC was founded in 1999 as a way to merge the Depository Trust Company (DTC) and the National Securities Clearing Corporation (NSCC). As such, …
Sometimes, being a real estate investor is like being a detective. You need to investigate the facts, uncover the truth, and work out the best course of action. If you don’t, you could make a costly mistake. Due diligence means taking care and caution when investing in a new property. That includes carrying out a …
Internal rate of return (IRR) is a financial metric used to predict the profitability of a project or asset. In effect, IRR is a measure of the expected annual return on investment. IRR is calculated by assuming the net present value (NPV) of cash flows is equal to zero and conducting a future cash flow …
In real estate, the debt snowball method refers to utilizing 100 percent of your rental income cash flow to quickly and aggressively pay off your rental property’s mortgage in its entirety. What is the debt snowball method? Essentially, the debt snowball method is an aggressive strategy to pay off credit cards, loans, and consumer debt …
