![]() ![]() Rental Property Calculator – An online tool investors can utilize to help determine a rental property’s return on investment, cash flow, and cap rate.Capitalization or Cap Rate – The capitalization rate references the ratio of net operating income produced to its capital cost or market value.Cash on Cash Return – This is the ratio, expressed as a percentage, of annual cash flow before taxes against the total cash invested.Net Operating Income – Net operating income equals the annual income left over after deducting taxes, fees, and utilities.Hard Money Loan – Offering faster processing but higher rates, a hard money loan bases itself on an investor or organization’s assets.Predictive Analytics – Predictive analytics provides real estate investors with a reliable outlook of future returns based on historical data.Appreciation – Due to increased demand, low supply, or inflation, appreciation accounts for a property’s increase in value over time.It measures the amount of profits an investor banks after any outgoing expenses. Cash Flow – This is an important metric for real estate investors.It compares outstanding debt to a buyer’s gross income. Debt-to-Income Ratio – Lenders use a debt-to-income ratio to evaluate an individual’s ability to repay monthly debts.Over time, equity will grow as the market appreciates and the mortgage balance decreases. Home Equity – This term refers to the difference in the present market value and the amount still owed on the mortgage.Real Estate Terms Every Rental Investor Should Know Thus, this determines how much you can afford. This letter from your lender should come before looking for a property and applying. Pre-Approval Letter – The pre-approval is an important step.The main difference is a broker may work independently, while a realtor or real estate agent must work under a broker. Real Estate Broker – A broker is a licensed professional who can represent parties during transactions.In addition to abiding by all local and state laws, realtors must also follow the association’s standards and ethics. Realtor – A realtor is an estate agent with the important distinction of belonging to the National Association of Realtors. ![]() Once they have obtained a license, real estate agents work under the supervision of a broker.
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