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Investment Glossary

Key terms every real estate investor should know

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

A

Appreciation

The increase in the value of a property over time. Capital appreciation occurs when you sell your shares for more than you paid, and is one of two main ways to earn returns from real estate investing.

C

Capital Gains

Profit realised when you sell an asset for more than you paid. In real estate, capital gains are taxed differently from rental income in many jurisdictions.

D

Dividend

A share of profits distributed to investors. On allocatte, rental income is distributed as dividends to property shareholders, typically on a monthly basis.

E

Equity

Ownership interest in an asset. When you buy shares in a property on allocatte, you own equity in that property and benefit from rental income and appreciation proportionate to your holding.

F

Fractional Ownership

A model where multiple investors jointly own a single asset. Each investor holds a fraction (or shares) of the property, enabling access to premium real estate with smaller minimum investments.

I

IRR (Internal Rate of Return)

The annualised return on an investment, accounting for the timing of cash flows. IRR is used to compare investments with different holding periods and payout structures.

N

NAV (Net Asset Value)

The total value of an asset minus its liabilities. For a property, NAV reflects the current market value. Share prices are often based on NAV divided by the number of shares.

R

ROI (Return on Investment)

The profit or loss from an investment expressed as a percentage of the initial cost. ROI = (Gain - Cost) / Cost × 100. A simple measure to compare different investment opportunities.

S

SPV (Special Purpose Vehicle)

A legal entity created to hold a single asset, insulating investors from liability. Properties on allocatte are typically held in SPVs, ensuring clear ownership and legal protection.

Y

Yield

The annual rental income from a property expressed as a percentage of its value. Gross yield = (Annual Rent / Property Value) × 100. Dubai prime areas often see 5–10% gross yields.