Flashcards in Chapter 22 Investing in RE Deck (20)
most prevalent form of RE investment, both individuals and corps may own RE directly and manage it as in investment income or cashflow.
increases in value.
inflation and intrinsic value affect appreciation.
the increase in the amount of money in circulation
is the result of a person's individual choices and preferences for a given geographic area
the total amount of money remaining after all expenditures have been paid.
exploration of the benefits and drawbacks of the investment
is the use of borrowed money to finance an investment
results from the addition to the amount paid as down payment on property of the principal portion of loan payments plus any increase in property value due to appreciations.
the process of using one property to drive the acquisition of additional properties.
allows an investor to recover the cost of an income producing asset through tax deductions of the asset's useful life.
Cost Recovery Money
may only be taken on personal property and improvements to land
taken periodically in equal amounts over an asset's useful life.
Accelerated cost recovery system
to claim greater deductions in the early years of ownership, gradually reducing the amount deducted in each year of useful life
the difference between the adjusted basis of property and it's selling price
determines the amount of gain to be taxed. the basis of the property is the investor's initial cost of RE.
used to defer cap gains tax by buying new property of like kind.
additional capital or property which will be taxed in an RE tansaction
is a business venture in which people pool their resources to own or deelop a particular piece of property.
REIT RE investment trust
investors take advantage of the same tax benefits as do mutual fund investors