
Understand essential property investment terms through clear definitions and simple examples—all in one place.
Choose a letter, browse by topic, or use search to find definitions instantly.
Oversight of a property’s strategy, performance, and long-term value.
Example: An asset manager reviews hotel performance and improvement plans.Average room revenue earned per occupied room over a period.
Example: Room revenue of $10,000 from 100 sold rooms gives an ADR of $100.An increase in a property’s market value over time.
Example: A property valued at $500,000 later increases to $550,000.Money spent to acquire, improve, or extend the useful life of a property asset.
Example: Replacing a hotel roof is typically treated as CapEx.Annual net operating income divided by the property’s value or price.
Example: A $50,000 NOI on a $1 million property indicates a 5% cap rate.Cash remaining after relevant income and expenses over a period.
Example: Rental receipts less operating costs and debt payments produce cash flow.Annual pre-tax cash flow divided by cash invested.
Example: A $4,000 cash flow on $100,000 invested equals 4%.An arrangement in which two or more parties hold interests in an asset.
Example: Two investors may each own an agreed interest in the same property.Borrowed funds used to help purchase or improve an asset.
Example: A property purchase may be funded with investor equity and a loan.A payment made to an investor under the governing terms of an investment.
Example: A property entity may distribute available cash when permitted.Spreading investments across assets or markets to reduce concentration.
Example: Holding interests in several property types can diversify exposure.The residual ownership value after liabilities are deducted from an asset’s value.
Example: A $1 million property with $600,000 debt has $400,000 equity.A planned way to dispose of an investment interest or realize value.
Example: An investment plan may target a sale after a set holding period.Ownership of a portion of an asset, directly or through a legal entity.
Example: An investor may hold an interest in an entity that owns a building.The length of time an investor expects to hold an investment.
Example: A project may target a five-year holding period, without a guarantee.Using borrowed money to increase investment exposure.
Example: Debt can amplify both gains and losses.How easily and quickly an asset or interest can be sold for cash.
Example: Private property interests may be less liquid than publicly traded shares.The possibility that market changes reduce an investment’s value or income.
Example: Lower demand can affect occupancy and property valuation.Property revenue minus operating expenses, generally before financing costs and income tax.
Example: Revenue of $300,000 less $180,000 in operations gives $120,000 NOI.The percentage of available units or rooms occupied in a period.
Example: 80 occupied rooms out of 100 available gives 80% occupancy.Recurring costs involved in running and maintaining a property.
Example: Insurance, utilities, repairs, and staff costs may be operating expenses.A person’s legal or economic stake in an asset or owning entity.
Example: An investor may own membership interests in a property-holding company.Combining different investments to avoid relying on a single asset.
Example: An investor combines residential and hospitality exposure.Day-to-day administration, maintenance, and tenant or guest operations.
Example: A property manager coordinates repairs and occupancy operations.An estimate of a property’s market value based on accepted methods.
Example: An appraiser reviews comparable transactions and income potential.Annual rental income expressed as a percentage of a property value or cost, using a defined method.
Example: Annual rent of $12,000 on a $200,000 property is 6% gross yield.A measure comparing investment gain or loss with investment cost.
Example: A $10,000 net gain on a $100,000 cost represents 10% ROI.Hotel room revenue divided by total available rooms, or ADR multiplied by occupancy.
Example: An ADR of $100 and 80% occupancy gives $80 RevPAR.A legal entity established for a specific business or asset purpose.
Example: A company formed to own one property can be an SPV.A legal document or record relating to ownership of real property; form varies by jurisdiction.
Example: The title document may name the property-holding entity rather than each investor.Build on what you've learned with these helpful Vairt resources.
Review available opportunities and take the next step at your own pace.
Explore Opportunities