PITI stands for principal, interest, taxes, and insurance: the four components that make up a complete monthly mortgage payment. Principal pays down the loan balance. Interest pays the lender for the use of the
Pass-through taxation is a tax structure in which a business entity pays no income tax itself. Instead, profits and losses flow through to the owners, who report them on their personal returns. Partnerships, LLCs,
An Opportunity Zone is an economically distressed community designated under the 2017 Tax Cuts and Jobs Act where qualifying investments can receive preferential federal tax treatment. The program was designed to pull long-term private
Operating expenses are the recurring costs of running and maintaining a real estate property: property taxes, insurance, management, repairs and maintenance, utilities, and the administrative costs of keeping the asset functioning. They sit at
Net yield is the annual return an investment produces after all operating costs, expressed as a percentage of the investment’s cost or value. Where gross yield compares raw rental income to price, net yield
A Mortgage Insurance Premium, or MIP, is the insurance fee paid by borrowers on FHA loans. It protects the lender, not the borrower, against loss if the loan defaults. MIP is the FHA counterpart
A mortgage is a loan secured by real estate, in which the property itself serves as collateral. The borrower receives capital to purchase or refinance the property and agrees to repay it over a
A mixed-use building combines two or more property types in a single structure or development, most commonly retail or office space on the lower floors with residential above. The format is a fixture of
A management fee is the recurring charge paid for professional oversight of a real estate asset or investment vehicle. In direct ownership, it usually means the property management fee paid to the company running
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