Real estate investment

Real estate investment

Industry: Financial services

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Real estate investment

Cost approach to valuation

Financial services; Real estate investment

The cost approach to valuation is a method of valuing real property that is based on the theory that a potential buyer would never pay more for a particular property than it would cost to reproduce ...

Cost method of valuation

Financial services; Real estate investment

The cost method of valuation is the method of determining the value of property by subtracting the estimated depreciation on the building from the cost to replace the property.

Cost of property

Financial services; Real estate investment

The cost of property is the sum of the price paid by the seller for the property plus all costs and expenses that can be reasonably attributed to the property under generally accepted accounting ...

Credit

Financial services; Real estate investment

As an accounting term, credit means a bookkeeping entry on the right side of an account recording the reduction or elimination of an asset or an expense, or the creation of or addition to a liability ...

Crossover point

Financial services; Real estate investment

The crossover point is the time at which the rental income on a property exceeds operating expenses, depreciation and interest on the mortgage. This point usually occurs in the seventh or eighth year ...

Capitalization

Financial services; Real estate investment

Capitalization is the process of discounting anticipated future profits to present market value by use of an appropriate capitalization rate. Discounting is making an allowance or deduction from a ...

Capitalization rate

Financial services; Real estate investment

Capitalization rate is the rate of interest that is considered a reasonable return on the investment used in capitalization net income to determine the value of the property.