Financial Glossary in Plain English for Investors A-Z Tough Lives
Financial Glossary in Plain English for Investors A-Z Tough Lives

Financial Glossary in Plain English for Investors

 

Abatement
Abatement is the technical term for something that is reduced. Take for example the removal of garbage which can be referred to as the abatement process. Who are the finding and destroying of cockroach Infestation. Within the financial realm can also be referred to in terms of rent fees In all sorts of manner such as one method of the landlord paying clients or another method the landlord Reducing rent fees.

Absorption Rate
In order to understand a little more about the absorption rate you need to understand a little bit about the way that a commercial building rent space to their tenants. To be more specific since it’s a rate, We look at that rentable space and how it is filled and divide that into net and gross absorption. As all things net, The Amount of your rentable space that is filled at the end of some time frame subtracted by the amount that your rental space Woodfield at the beginning of that time frame is the net absorption. Gross absorption has a slightly different definition than one would suspect you’re the word gross attached to it, in this case you take all of your square footage of the space that you are renting that releasing over some stretch of time and you measure that up without taking note of any of the empty space within that same area during that same time frame. Some of that difference between the net absorption and be gross absorption comes into play that the net absorption is that occupied amount at the end of that. Not including the amount that was occupied at the beginning of that period. Where we do not take into Our calculations the amount of space that was empty during that.


Abstract of Title
If you have a property in and are holding on to the title and want to know if it’s Historical summation of all of the instruments that Were recorded and proceeded on that title of the property you would request an abstract of that title, which is otherwise known as an abstract of title.

Adjustable Rate Mortgage or ARM
An arm is a bit of a Fickle Financial instrument. Some people go by variable rate mortgage, because that’s just what it does. To be a little more specific, an arm is an adjustable rate mortgage. It’s a style of loan where the interest rate changes and your payments are calculated into a period that changes throughout the stretch of your loan. The amount and manner that it changes is based on an index. This index is a sort of benchmark that reflects the prime rate, where the prime rate is usually the Libor.

Adjusted Sales Price
What you’re creating a contract that has a whole host of credit that is given by the seller And then you take that contract and adjust it to indicate a new sale price what you end up with is an adjusted sale price. Which is important to reflect the differences between the actual value, or an appraised value, or a banked calculations on the True Value of a property. This type of adjusted sale prices not always done, it is based on the concessions and credit that are given to the buyer by the owner.

Air Rights
With the amount of drones that are flying overhead it is important nowadays to understand a little bit about the technical concerns of the airspace that lives above your property. Be aware that you are able to legally use and control the space above your own property and land. In fact you can also take those right for the airspace and lease it. For example to the film industry, as well as rent or sell it as a separate entity.

Amenities
In the case of maximizing profits, and having the best price for a certain neighborhood if you are renting out properties in your commercial space One of those key elements are the amenities that your space has. Usually you can command higher socioeconomic status, as well as price for your selling of the commercial space or Leasing and renting for homeowners and office workers. Don’t forget to take into consideration all of the side things Beyond square footage and location for example in the city. Do you have a space that can be utilized as a children’s area, or what about storage space for someone’s vehicle for their golf equipment, do you have a functional gym or health club or Spa within the building. What about a grocery store? Is there a doorman that will greet and sign for their packages every day. Each of these can and should be evaluated to expand on the amenities within your space.

Amortization
Amortization is the periodic payment of principal and interest on a liability (including a mortgage), or the write-off of a non-depreciable asset over a scheduled term.
There are two ways to take a look at what amortization is. The one that is less often understood by our clients, is when they have an asset that fits into the non depreciating categories and yet they want to write off a portion of that over some stretch out time. The other amortization is more understood with anyone that has held a mortgage but it fits into other styles as well. In general though understanding that putting in money into say a loan or a mortgage in periodic manner in order to pay off the interest on the tail end or the principal, front end Is still considered amortization.


Amortization Schedule
A loan holder for Bank, for example a mortgage him fall under an amortization. If that amortization is played out, a schedule will be designated for payments over a stretch of time that can be paid out for either the tail end of the loan which covers the interest, or the front end of the loan which will cover principal. It will be generated while the loan is being created, one must not simply feel that putting more money in with cover one or the other without an indication from your bank loan holder in the beginning. There are some loans that allow for the amortization schedule to be triggered by the payment beyond the normal things. That is the holder of that loan will be able to indicate which one they wanted to go to. There are also loans that will restrict the ability to pay off a loan in advance. And there are fees for fines that can be cost on top of your loan payments if a payment is made in advance.

Annual Percentage Rate or APR
As an investor there are times when she want to compare mortgage Financial products and other loans against each other. For example you own a mortgage and are preparing to utilize One Mortgage as leverage for another building, you often will want to understand at what point it becomes financially realistic to do this instead of continuing to pay off the old mortgage on a single building. the annual percentage rate for APR is important for doing these types of calculations. It’s a simplistic tool for comparison. It generally shows the full amount that you are paying for all of the components of this loan or mortgage into 1 fancy formula. It is the effective rate that you’re charged on the loan of Interest, and as the annual indicates it is calculated on a yearly basis. If you are comparing loans and mortgages using APR, be sure that they are both using yearly terms, and be sure you are interested in comparing based on interest.

Appraisal
Another tool for comparing properties across the board, as well as in your Holdings is to hire a certified licensed and bonded and insured appraiser. While you can certainly do these calculations yourself, or have the real estate agent send you an analysis of the neighborhood and of your property a licensed appraiser will obtain an evaluation of your property compared to surrounding properties values will paint a true understanding of the value of that home before you buy it, or before you’re ready to sell it. Quite often you do not need to spend additional money as your bank or mortgage holder for lender will most certainly do this to get an understanding of the value of the property and then will utilize that as a ratio towards how much they will loan you, versus how much they will get back but they have to sell it himself. The way this works is the appraiser use your home, and then view similar homes in terms of square footage, building style, neighborhood, and other amenity features such as highways and schools and income levels. All of this goes into the lending limit for your given property.


Assessment
Assessments are something that can never be overlooked if you’re purchasing a condo within a building for a home in a area that has a Cooperative Group of people managing your area. This is different than a homeowners association which can also limit what you can and cannot do with your property. However this one goes even further in that it can actually charge you for amenities features build out and fix it. If you own an apartment or a condo within a building and they are installing a new elevator they will assess the value of that install and then distributed out to all of the owners within that building. This is on top of your traditional building fees that are also build out, on top of your rental fees or lease fees or mortgage. If you have an overzealous board of directors they can do repairs on a yearly basis which can include Landscaping, Roofing, elevators, Windows, fire suppression equipment. These can be huge amounts of money, which are rolled over to new owners. Assessments are something to ask about, they will be different for every single building that you look at. Nevertheless they are offset by being amenities, which can vastly increase the amount of rent you can claim for the resale value in the future. Completely a double-edged sword.

Asset
They’re a very strict definitions of what falls into the category of an asset, how it depreciates or what its value is. Nevertheless if you own something that has a specified value you own an asset. That asset can be used as leverage in the case of real estate for the purchase of a second building, it can also be utilized for construction loans, or loaned out and rent it to others 4 least others in the pace of farm equipment or vehicles.

Assignment
Just about any time a mortgage is purchased, or leased or some form of trust of Deeds are transferred the process of an assignment has been under gone. The key thing about an assignment is to understand that it is the transfer from one person or client to another a whole slew of right that are embedded within a contract.This is the legal manner that a new owner and revamp a space or a commercial space and entity and business can redefine the zoning laws for a location. If you cannot show an assignment has been given to you and you cannot have any rights to do all sorts of things within your space.

Attorney-in-Fact
There are times when a client needs to be removed from a certain legal process. We can be for all sorts of reasons, from anonymity, to winning the lottery and claiming the money while remaining out of the picture and the Limelight of the public. However this can also happen in the case of positions owning property and removing their liability in case they’re patients sue them and want to steal their properties through a legal process for a court case. there are numerous other reasons for this, however an attorney in fact has the capabilities of doing all the same legal requirements signatures lot transfers and other components of legal power of attorney methodology.


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