Business / Real Estate Glossary

Income Approach: The process of estimating the value of an income-producing property through capitalization of the annual net income expected to be produced by the property during its remaining useful life.

Income Ratio: The relationship between a persons total income and the amount needed to make one months mortgage payment.

Incorporeal Right: A nonpossessory right in real estate, for example, an easement or a right of-way.

Increasing And Diminishing Returns: The addition of more improvements to land and structures which increases value only to the assets maximum value. Beyond that point, additional improvements no longer affect a propertys value . . . View Full Definition

Independent: A brokerage firm operating on-its-own without an affiliation with a regional or national franchise.

Independent Contractor: One who is retained to perform a certain act, but who is subject to the control and direction of another only as to the end result and not as to how he or she performs the act. The critical . . . View Full Definition

Index: Used to set interest rates, such as the six month Treasury bill rate.

Index Lease: A lease containing an escalation clause that is tied to an index.

Indirect Management Costs: Expenses in a budget of a real estate agency or parent company the are partially attributable to the operation of a management department.

Individual Retirement Account (IRA): An Individual Retirement Account (IRA) is an IRS-approved way for any working individual to set aside savings for retirement each year in a tax-deferred account. The individual is not taxed . . . View Full Definition

Indoor Air: Breathing air inside a habitable structure, often highly polluted because of lack of exchange with fresh oxygen from outdoors. Solvents, smoke, paints, furniture glues, carpet padding, and o . . . View Full Definition

Industrial Broker: A real estate broker who specializes in brokering industrial real estate.

Industrial Development Bonds: A bond that allows private investors to finance apartment and commercial development by using tax-exempt, inexpensive funds. TRA 86 imposed severe restrictions on this financing technique.

Industrial Property-Parks: A property primarily used for the production or manufacture of goods or products.

Industrial Revenue Bonds: Bonds issued for the development of an industrial park or the construction of a building for lease to commercial tenants.

Inflation: The gradual reduction of the purchasing power of the dollar, usually related directly to the increases in the money supply by the federal government.

Ingress: A way to enter a property - access. The opposite of egress.

Inheritance Taxes: An estate tax imposed by the state on heirs for their right to inherit property. The tax is not levied on the property itself, but rather on the heirs for their right to acquire the property . . . View Full Definition

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