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RM Reports / RM Warehouse

Weekly Word Wizard

Welcome back to RealtyMyths weekly word wizard! Here are some terms that you should know.

Capital budget

An estimate of costs to cover replacements and improvements and the corresponding revenues needed to balance them, usually for a 12-month period. Different from an operating budget.

Cost of equity

This is the opportunity cost that your equity could have earned if you did not invest in property.

Capital gain

Profit on the sale of an asset that is subject to taxation. Capital Improvements. Major improvements made to a property that is written off over several years rather than expensed off in the year in which they are made.

Capitalization rate

The percentage of return on an investment when purchased on a free-and-clear or all-cash basis.

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