Cash-on-cash rate
A return measure that is calculated as cash flow before taxes divided by the initial equity investment.
Cash flow model
The framework used to determine the cash flow from operations and the cash proceeds from sale.
Cash flow before tax/es (CFBT)
For properties, it is the result of calculating the effective rental income, plus other income not affected by vacancy, less total operating expenses, less annual debt service, funded reserves, leasing commissions, and capital additions. The ...
Cash flow after tax/es (CFAT)
For properties, it is the result of first calculating the net operating income, less mortgage and construction loan interest, less cost recovery for improvements and personal property, less amortization of loan points and leasing commissions to...
Capital tax
Any tax on a change in capital value (including capital gains tax, estate tax, or inheritance tax); as distinguished from a tax on income. (Encyclopedia of Real Estate Terms 2nd Edition, Damien Abbott)
Capitalization rate
A percentage that relates the value of an income-producing property to its future income, expressed as net operating income divided by purchase price. Also referred to as cap rate.
Capital market
The supply and demand for resources to invest in real estate and other investments.
Capital gain
Taxable income derived from the sale of a capital asset. It is equal to the sales price less the cost of sale, adjusted basis, suspended losses, excess cost recovery, and recapture of straight-line cost recovery.
Capital expenditures
Property improvements that cannot be expensed as a current operating expense for tax purposes. Examples include a new roof, tenant improvements, or a parking lot—such items are added to the basis of the property and then can be depreciated ...