Glossary

Quick definitions of key investing terms
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Glossary

Acquisition Costs

The total costs involved in buying a property, in addition to the purchase price. These usually include real estate transfer tax, title insurance, attorney or escrow fees, appraisal costs and related charges. For fractional investors, acquisition costs are built into the overall funding target.

Glossary

Annualized Return

Annualized return shows the steady percentage an investment grows per year, assuming compounding, even if it was held for several years. It allows fair comparison between investments of different lengths. For example, if $1,000 grows to $1,229 over three years, the annualized return is about 7.1% per year.

Glossary

Capital Appreciation

The increase in a property’s value over time, realized when it is sold. For example, if a property is bought at $400,000 and sold five years later at $500,000, the capital appreciation is $100,000 (25% overall), which equates to an annualized growth rate of about 4.6% per year.

Glossary

Cash Flow

The net income generated from a property after deducting operating expenses such as taxes, insurance and maintenance. Positive cash flow means the property produces surplus income, which can be distributed to investors.

Glossary

Net Yield

The annual percentage return a property generates after all expenses are deducted from rental income. Example: The property is priced at $300,000. If gross rent is $24,000 a year and expenses are $6,000, net rent is $18,000. Net yield = 18,000 ÷ 300,000 = 6%.

Glossary

Purchase Price

The agreed-upon amount paid to acquire a property, excluding additional costs such as taxes, title fees and closing expenses.

Glossary

Return on Investment (ROI)

How much you actually earn on your investment overall. It’s shown as a percentage: ROI = total profit ÷ amount invested (where profit is net rent received plus any net gain at sale). Example: if you invest $1,000 and get $1,300 back in total → profit $300 → ROI 30%.

Glossary

Total Return

How much you earn overall on your investment over the whole holding period. It adds up every rental distribution paid to you during the hold (for example, quarterly over five years) plus your share of the net gain at sale). Example: if you invest $1,000 and get $1,300 back in total → profit $300 → ROI 30%.

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Glossary
V

Variable Expenses

Costs that fluctuate depending on property usage or occupancy, such as utilities, repairs and maintenance. These differ from fixed expenses like insurance or property taxes, which remain consistent.

Glossary
V

Verification (KYC/AML)

The process of confirming an investor’s identity, residency and source of funds to comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations.

Glossary
V

Volatility

The degree to which the value of an asset or market fluctuates over time.

Glossary
W

W-9 Form

An IRS form used to collect a US investor’s taxpayer identification number (TIN) or Social Security Number (SSN).

Glossary
W

Waitlist

A list you join to get early access to new property deals so you can invest as soon as it goes live.

Glossary
W

Warranty Deed

A legal document used for property transfers that guarantees the seller holds clear title and has the right to sell. It protects the buyer against any future claims or disputes over ownership.

Glossary
W

Wear and Tear

Normal deterioration from everyday use, not tenant damage. Deposits cannot be deducted for fair wear and tear.

Glossary
W

Working Capital

The short-term funds available to cover a property’s operating expenses, such as maintenance, insurance and management fees. Separate from long-term reserves for major works.

Glossary
Y

Year-End (Financial Year End)

The LLC’s accounting cut-off date for annual accounts and reporting.

Glossary
Y

Year-on-Year (YoY)

A comparison with the same period last year, often used for rent growth or valuation changes.

Glossary
Y

Year-to-Date (YTD)

From the start of the current year up to today. Used for metrics like YTD rent collected or YTD occupancy.

Glossary
Y

Yield

The percentage return generated from an investment, usually calculated as annual income divided by the total amount invested. In real estate, yield can refer to gross yield (before expenses) or net yield (after expenses). Example: total cost to buy $500,000; annual rent $36,000; expenses $6,000 → gross yield 7.2% (36,000 ÷ 500,000) and net yield 6% ((36,000 − 6,000) ÷ 500,000).

Glossary
Y

Yield Compression

A market condition where property yields decrease due to rising property prices while rental income remains stable. Yield compression often occurs in high-demand markets and can indicate strong investor confidence.

Glossary
Z

Zakat

An obligatory form of almsgiving in Islam, typically calculated as 2.5% of qualifying wealth held for one lunar year. For investors, Zakat may be due on the current market value of their real estate investments, net of liabilities, depending on individual circumstances and Shariah guidance.

Glossary
Z

Zero Debt Structure

An investment model where properties are acquired entirely with investor capital and no borrowing. This ensures the investment remains free from interest (riba) and aligns with Shariah principles.

Glossary
Z

Zoning Laws

Local government regulations that dictate how land and properties can be used, such as for residential, commercial or mixed purposes. Zoning laws also determine building height, density and setbacks, directly influencing property development and valuation.

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