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Intermediate2 hours14 terms

LTC Planning & Insurance Key Terms

This collection offers a curated reference of key terms that might be helpful when exploring long-term care planning and insurance. It's designed to clarify commonly referenced concepts, providing a practical terminology guide for investors considering how to protect their retirement portfolios.

Term Collection

1

Rental Property

A rental property is real estate purchased with the intent to generate income through tenant rent payments and potential property value appreciation.

Beginner13-14 min
2

Debt Service

Debt service is the total amount of principal and interest payments required to repay a loan over a specific period, typically for a mortgage or other property-related financing.

Beginner11-12 min
3

Home Equity Loan

A Home Equity Loan is a type of second mortgage that allows homeowners to borrow a lump sum against the equity in their property, repaid over a fixed term with a fixed interest rate. It's often used by real estate investors to fund new acquisitions or property improvements.

Intermediate5-6 min
4

Net Operating Income

Net Operating Income (NOI) is a key real estate metric representing a property's annual income after deducting all operating expenses, but before accounting for debt service, income taxes, and capital expenditures.

Intermediate11-12 min
5

Real Estate Portfolio

A real estate portfolio is a collection of investment properties owned by an individual or entity, designed to generate income, appreciate in value, and diversify investment risk.

Beginner2 min
6

Cash Flow

Cash flow in real estate investing represents the net income generated by a property after all operating expenses and debt service payments have been made. Positive cash flow indicates profitability, while negative cash flow suggests a loss.

Intermediate2-3 min
7

Home Equity Line of Credit

A Home Equity Line of Credit (HELOC) is a revolving line of credit secured by the equity in your home, allowing flexible borrowing and repayment up to a set limit.

Intermediate14-15 min
8

Reverse Mortgage

A reverse mortgage allows homeowners, typically seniors aged 62 or older, to convert a portion of their home equity into tax-free cash without having to sell their home or make monthly mortgage payments. The loan is repaid when the last borrower leaves the home permanently.

Intermediate5-6 min
9

Liquidity

Liquidity in real estate refers to the ease and speed with which a property can be converted into cash at its fair market value. Real estate is typically considered an illiquid asset due to the time and costs involved in selling.

Intermediate5-6 min
10

Equity

Equity in real estate is the portion of a property's value that an owner truly owns, free and clear of any outstanding debts or liens. It is calculated as the property's current market value minus the total amount owed on any mortgages or loans.

Beginner12-13 min
11

Real Estate Trust

A real estate trust is a legal arrangement where a property owner transfers title to a trustee, who holds and manages the property for the benefit of designated beneficiaries, offering advantages like privacy, asset protection, and streamlined estate planning.

Intermediate15-18 min
12

Refinancing

Refinancing is the process of replacing an existing mortgage or loan with a new one, often to secure better terms, lower interest rates, or access built-up property equity.

Intermediate15-18 min
13

Property Management

Property management is the professional oversight and operation of real estate, typically rental properties, on behalf of an owner, handling tasks from tenant acquisition to maintenance and financial reporting.

Beginner11-12 min
14

Life Estate

A Life Estate is a form of property ownership where an individual (the life tenant) holds the right to possess and use a property for their lifetime, after which ownership automatically transfers to a designated third party (the remainderman).

Advanced5-6 min

Common Questions