Partially amortized mortgage loan: The payments do not repay the loan over its term and thus a lump sum (balloon) is required to repay the loan.
Passive income: Income from rental activity, limited business interests, or other activities in which the investor does not materially participate.
Passive losses: Losses from the ownership of passive investments.
Payment: A periodic amount paid or received for two or more periods.
Perfect market: A market in which the products are homogenous, there is complete information, and no buyers or sellers may influence the market.
Periodic cash flow: The amount of income received periodically (rents, dividends, etc.).
Perpetuity: A form of annuity in which an amount is received at the end of the period (a year, a month) forever.
Physical depreciation: The physical decay or deterioration of a property.
Portfolio income: Income from interest, dividends, royalties, or the disposition of property held for investment.
Positive leverage: Borrowed funds are invested at a rate of return h higher than the cost of the funds to the borrower.
Potential rental income: The total amount of rental income for a property if it were 100% occupied and rented at competitive market rates.
Present value: The sum of all future benefits accruing to the owner of an asset when such benefits are discounted to the present by an appropriate discount rate.
Price: The dollar amount that was offered, asked, or actually paid for a property.
Principal: The portion of a loan payment used toward reducing the original loan amount.
Property type: The classification of commercial investment real estate. The four primary property types are: retail, industrial, office, and residential.
Purchasing power risk: The variability in the future purchasing power of income received from an investment.
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