The Single Monthly Mortality (SMM) is the probability that one or more policyholders will die during a particular month. The SMM is used to calculate the expected number of policyholder deaths per month. How do I calculate monthly mortality rate? The monthly mortality rate is the percentage of people who die within a month of … Read more
The cash-on-cash yield is a metric used to assess the profitability of a real estate investment. It is calculated by dividing the annual cash flow from the investment by the total amount of cash invested. For example, if an investor purchases a property for $100,000 and receives $10,000 in annual cash flow from the investment, … Read more
A DownREIT Definition is a type of real estate investment trust (REIT) that is structured as a partnership between the REIT and one or more other entities. The other entities are typically either other REITs or operating companies. Under this structure, the REIT owns a controlling interest in the other entities, which are known as … Read more
A graduated lease is a type of lease agreement in which the amount of rent is increased at regular intervals. The intervals are typically six months or one year. The purpose of a graduated lease is to provide the tenant with an incentive to renew the lease agreement for another term. What is the Habendum … Read more
A rent ceiling is the maximum amount of rent that a landlord can charge for a rental property. Rent ceilings are typically set by government agencies in order to protect tenants from being charged excessive amounts of rent by landlords. Why is the concept of rent control considered a price ceiling? The reason rent control … Read more
National Association of Real Estate Investment Trusts (Nareit) Definition: The National Association of Real Estate Investment Trusts (Nareit) is a trade association that represents the interests of real estate investment trusts (REITs) and publicly traded real estate companies in the United States. Nareit’s members own, operate, and finance income-producing real estate, including office buildings, apartments, … Read more
A turnkey property is a fully-functional property that is ready for immediate occupancy. Turnkey properties are typically purchased by investors who intend to rent or lease the property to tenants. The term “turnkey” refers to the fact that the property is ready to be used without any additional work or investment required. Turnkey properties are … Read more
A percentage lease is a commercial lease in which the tenant pays a base rent, plus a percentage of their sales. The percentage is typically calculated as a percentage of gross sales, but can also be based on net sales or some other metric. The advantage of a percentage lease for the landlord is that … Read more
A pass-through certificate is a type of real estate investment that allows investors to pool their money together to finance a property or properties. The property or properties are then leased to a tenant or tenants, and the rent payments are passed through to the investors. This type of investment can be a good way … Read more
The phrase “running with the land” is often used in real estate to describe a situation where someone owns a piece of property and has the right to use it in any way they see fit, without having to get permission from anyone else. This includes the right to build on the land, use it … Read more
