Real Estate Glossary
Essential real estate investment terms explained in plain English.
Cap Rate
Capitalization Rate — NOI divided by property value. Measures return without considering financing.
Cash-on-Cash Return
Annual cash flow divided by total cash invested. Measures actual return on your money.
DSCR
Debt Service Coverage Ratio — Property income divided by debt payments. Used for loan qualification.
NOI
Net Operating Income — Gross income minus operating expenses (before debt service).
ARV
After Repair Value — Estimated property value after renovations are complete.
LTV
Loan-to-Value — Loan amount as a percentage of property value.
GRM
Gross Rent Multiplier — Property price divided by annual gross rent. Quick screening tool.
Vacancy Rate
Percentage of time a property is unoccupied. Typically 5-10% for residential rentals.