Key Concepts Flashcards
What is cash flow in real estate?
The amount of money remaining after debt service has been paid and before personal income taxes are considered.
What does cash flows refer to?
The stream of income over a period (a month, a quarter, a year, etc.).
What is the purpose of cash budgets?
To monitor cash inflows and outlays by comparing budget projections to actual results.
How can controlling cash be accomplished?
By analyzing trends in income and expenses.
What is the internal rate of return based on?
Discounted cash flows.
When is the internal rate of return used?
When cash flows change between periods.
Name one type of measure useful in assessing real estate performance.
Cash-on-cash return.
Fill in the blank: Cash flow is an important indicator of _______ in real estate.
[profitability]
What are pretax and after-tax cash flows examples of?
Measures useful in assessing real estate performance.
