Common Real Estate Terms

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There are currently 5 names in this directory beginning with the letter I.
Improvements refer to enhancements made to a property to enhance its physical appearance, both internally and externally. This can encompass renovations, modifications, and additions such as playgrounds, gates, and carports, aimed at improving the overall quality and functionality of the property.
Indirect Costs
Indirect Costs, also known as Soft Costs, are development expenses that do not encompass material and labor costs. These costs typically include expenses related to design, permits, legal fees, and other non-material or non-labor elements of a project.
Interest Rate
The Interest Rate is the proportion of a loan or deposit balance charged as interest per period, typically expressed as a percentage. It determines the amount of interest due per period, based on the principal sum, compounding frequency, and the duration for which it is borrowed or lent.
Interest-Only Loan
An Interest-Only Loan is a type of loan in which the borrower is only required to pay the interest for a specified period, with the principal balance remaining unchanged during the interest-only period. After this period, the borrower typically begins paying both principal and interest.
Internal Rate of Return (IRR)
The Internal Rate of Return (IRR) is the annualized rate of return at which the net present value of all cash flows from an investment equals zero. It considers the timing of when returns are received, providing insight into an investment's potential profitability. For example, if an investment of $100,000 yields a total of $100,000 in returns over five years, the average annual return would be 20%, but the IRR would consider the timing of the payouts, potentially resulting in a different rate of return.
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