Financial Leverage
Definition of "Financial leverage"
A portion of a real estate company's assets financed with debt instead of equity. It involves interest an principal obligations. Financial leverage is beneficial to real estate investors as long as the borrowed funds generate a return above the cost of borrowing. the increased risk can offset the general cost of capital.
Popular Real Estate Terms
Lack of supply of real property. When demand exceeds supply, price of the property goes up. For example, if there are only a few homes in a town that everyone desires to reside in, the ...
Agreement in which the contract price to build something is equal to the total costs incurred plus a predetermined profit. The profit may be based on a percentage of cost (e.g., 20% of ...
Real estate property incentive offered for reasons other than individual merit. A discriminatory inducement is an effort to get an individual to buy or sell, rent, or lease real estate ...
The modified accrual method is defined as an alternative accounting method that combines the two basic methods of accounting, the accrual method and the cash method. While the accrual ...
Levy charged to use something such as water supplied by the town. ...
Valuation method for land or improvements to property. It takes into account gross rentals less operating expenses. ...
Unfortunately, we encounter false advertising daily. False advertising refers to deceptive or misleading ads and commercials that fail to showcase a product’s or service’s ...
Borrower who gives property as collateral for a loan. ...
How much of an investment made in real estate has been recovered expressed in dollars or in percentage terms. ...
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