Key Terms - Chapter 20 Flashcards
1
Q
appreciation
A
An increase in property value
2
Q
cash flow
A
Regular income produced by a rental property after deducting operating expenses and debt service.
3
Q
leverage
A
The use of borrowed funds, which allows an owner to control an investment greater than the owner’s equity in the investment. The larger the percentage of borrowed money, the greater the leverage.
4
Q
liquidity
A
The ability to convert an asset into cash.
5
Q
return on investment
A
The amount of money that is obtained relative to the amount that was initially invested.
