Building Capitalization Rate

Definition of "Building capitalization rate"

Valerie Dirks real estate agent

Written by

Valerie Dirkselite badge icon

Keller Williams Realty

Rate of return of capital invested in building improvements. Is segregated from land investments and provides a method of separating property income streams between improvement and land investments. Normally the yield is stated as an annual rate of profit per dollar of investment. Three factors are necessary in order to correctly compute the building capitalization rate: (1) The amount of the investment. (2) The size and duration of the income stream. (3) The eventual resale proceeds.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Real Estate Terms

Method of construction where part of the structure is supported by a cantilever beam or truss. ...

(1) Revising the selling price of real property to reflect what it would be worth if typical financing was available. (2) How much real property would be sold for if all cash was involved. ...

A certificate of ownership in a real estate company. Pledged assets for a borrowing. An example is an office building serving as collateral for the mortgage. Way of protecting property ...

Title deficiency that prevents a seller from successfully transferring property to a buyer. A title company may discover a title defect ( due to encumbrances against the property or failure ...

Part of something such as the units making up a heating or air conditioning system in a building. ...

How much water may be retained in a unit, such as an expansion tank in a home. ...

A clearly stated notice that an owner or operator will not assume responsibility for an inherent risk. For example, at a parking garage, a large notice of nonresponsability clearly states ...

series of rows. townships moving as a row from east to west. It covers a 6-miles area in width. The term is employed under the rectangular survey method. ...

individual who purchases property for another for the purpose of not identifying to the seller and other interested parties the real identity of the true acquirer. The individual who makes ...

Popular Real Estate Questions