Intermediate termsInflation BasicsA curated collection of key terms about Inflation BasicsLearning Path1Inflation HedgeAn inflation hedge is an investment, such as real estate, that is expected to retain or increase its value and purchasing power during periods of rising inflation, protecting wealth from currency devaluation.Intermediate13-14 min2Adjustable-Rate MortgageAn Adjustable-Rate Mortgage (ARM) is a home loan where the interest rate can change periodically based on an index, leading to fluctuating monthly payments after an initial fixed-rate period.Beginner14-15 min3Operating ExpensesOperating expenses are the ongoing costs of running and maintaining a real estate investment property, excluding mortgage principal and interest payments, and capital expenditures.Beginner13-14 min4Capitalization RateThe Capitalization Rate (Cap Rate) is a real estate valuation metric used to estimate the potential rate of return on an investment property, calculated by dividing its Net Operating Income (NOI) by its current market value.Intermediate14-15 min5Rent Escalation ClauseA rent escalation clause is a lease provision that mandates periodic increases in the base rent over the term of the lease, typically to account for inflation or rising operating costs.Intermediate13-14 min6Cost of CapitalThe Cost of Capital is the blended rate of return a real estate investment must generate to cover the costs of its financing, encompassing both debt and equity capital.Intermediate14-15 min7Property AppreciationProperty appreciation is the increase in a real estate asset's value over time, driven by market forces and investor improvements, leading to potential profit upon sale.Beginner11-12 min8Net Operating IncomeNet Operating Income (NOI) is a key real estate metric representing a property's annual income after deducting all operating expenses, but before accounting for debt service, income taxes, and capital expenditures.Intermediate11-12 min
