Macroeconomic concepts, interest rates, inflation, Federal Reserve policy, and economic cycles.
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Foundation terms you need to know first (42 terms)
The marginal tax rate is the tax rate applied to your very last dollar of taxable income. It's crucial for real estate investors to understand how additional income or deductions will impact their tax bill.
Real assets are physical, tangible investments such as real estate, commodities, and infrastructure, valued for their intrinsic properties and often used as an inflation hedge and portfolio diversifier.
Building investor confidence is the process of developing a strong belief in one's ability to make sound real estate investment decisions, manage risks, and achieve financial goals through continuous learning and practical experience.
Housing supply and demand refers to the fundamental economic principle that explains how the availability of homes (supply) and the desire for homes (demand) interact to determine housing prices and market conditions.
The fundamental resources—land, labor, capital, and entrepreneurship—used to produce goods and services, including real estate, and are crucial for understanding economic activity and investment potential.
Complex strategies and professional concepts (43 terms)
Tax-exempt debt refers to bonds or other debt instruments issued by governmental entities or qualified private entities, where the interest earned by the bondholder is exempt from federal, and often state and local, income taxes.
A market phenomenon where a declining real estate market appears to reverse and begin an upward trend, only to quickly resume its downward trajectory, trapping investors who bought into the false recovery. It often leads to significant losses for those who misinterpret the temporary rebound as a true market bottom.
The Case-Shiller Home Price Index is a leading measure of U.S. residential real estate values, tracking changes in home prices across 20 major metropolitan areas and nationally using a repeat-sales methodology.
The Accounts Payable Turnover Ratio measures how quickly a company pays off its suppliers and short-term debts, indicating the efficiency of its working capital management and liquidity.
Other Comprehensive Income (OCI) represents revenues, expenses, gains, and losses that are excluded from net income but are recognized in comprehensive income, reflecting changes in equity from non-owner sources. It captures certain unrealized gains and losses that bypass the income statement.
A Qualified Opportunity Fund (QOF) is an investment vehicle that allows investors to defer, reduce, and potentially eliminate capital gains taxes by reinvesting those gains into designated low-income urban and rural communities called Opportunity Zones.
Quantitative Easing (QE) is a monetary policy where a central bank buys government bonds and other financial assets to inject money into the economy, lower long-term interest rates, and stimulate economic activity during downturns.
Quantitative Tightening (QT) is a monetary policy where a central bank reduces its balance sheet by allowing maturing assets to expire without reinvestment, thereby decreasing the money supply and tightening financial conditions to combat inflation.
Real assets are physical, tangible investments such as real estate, commodities, and infrastructure, valued for their intrinsic properties and often used as an inflation hedge and portfolio diversifier.
Real estate refers to land and any permanent physical structures or improvements attached to it, encompassing everything from residential homes to commercial buildings and undeveloped land. It is a tangible asset that can be bought, sold, or leased for various purposes, including living, business operations, and investment.
The real estate market encompasses all transactions involving the buying, selling, renting, and leasing of land and properties, influenced by supply, demand, and economic factors.
The Real Estate Market Cycle refers to the recurring, non-linear pattern of expansion and contraction that characterizes real estate markets, driven by economic, demographic, and supply-demand factors.
A real estate recession is a significant and sustained decline in real estate market activity, characterized by falling property values, reduced transaction volumes, and increased foreclosures, often linked to broader economic downturns.
A real estate seminar is an educational event, often held in person or online, designed to teach individuals about various aspects of real estate investing, market trends, and property management.
Real Options Analysis (ROA) is an advanced valuation methodology that applies financial option pricing theory to real assets and investment opportunities, quantifying the value of managerial flexibility to adapt to future uncertainties.
Real return measures the actual purchasing power gain of an investment after accounting for inflation, providing a more accurate assessment of an investor's wealth growth.
Real wages represent the actual purchasing power of an individual's earnings, adjusted for inflation, providing a clearer picture of economic well-being and its impact on real estate affordability.
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Wills, trusts, estate taxes, succession planning, beneficiary planning, and wealth preservation.
Key financial calculations, ratios, and valuation methods used to analyze real estate investments and performance.