Chapter 16: Commercial Real Estate

other income

Income earned from laundry facilities at a rental property will be included under which of the following line items?

Debt service

Net operating income does NOT take into account which of the following?

effective gross income

The actual income generated from a property before expenses, is known as...?

net operating income

The value of a commercial property is primarily based on which of the following?

yield

a return on investment

time value of money

the idea that money available at the present time is worth more than the same amount in the future due to its potential earning capacity

capitalization rate

the rate of interest which is considered a reasonable return on the investment, and used in the process of determining value based upon net income

leverage

the use of borrowed capital (mortgage) to increase the potential return of an investment